Mubasher: Saudi Arabia's population will expand by over 40% between 2015 and 2050, while the elderly population will increase rapidly to 15% of the total, according to a recent report issued by S&P Global Ratings.
The kingdom's growing elderly population may pressure on public finances and increase government debt over the next three decades, in the absence of government reforms to contain the cost of age-related spending, according to S&P Global Ratings report "Global Aging 2016: Saudi Arabia's Aging Population Could Drag On Public Debt" published Monday.
“Without further reforms to limit spending on pensions and health care, this would lead to significant increases in government debt to GDP and drag on the sovereign ratings,” the report added.
KSA’s population is expected to expand rapidly from 32 million to 46 million between 2015 and 2050. Over the same period, the elderly population will rise to 15% of total inhabitants from 3% today.
Age-related government expenditure on pensions and health care would grow to 14% of GDP by 2050 from 6% today by our analysis. "This could lead to a rapid increase in Saudi Arabia's net debt ratio to 340% of GDP by 2050 if governments were to take no further policy action," said S&P Global Ratings analyst Trevor Cullinan. "
