NEW YORK/TOKYO |
NEW YORK/TOKYO (Reuters) – Ratings agency Standard Poor’s warned it may downgrade “a number of highly rated” Group of 20 countries from 2015 if their governments fail to enact reforms to curb rising healthcare spending and other costs related to ageing populations.
Developed nations in Europe, as well as Japan and the United States, are likely to suffer the largest deterioration in their public finances in the next four decades as more elderly strain social safety nets, SP said in a report.
“Steadily rising healthcare spending will pull heavily on public purse strings in the coming decades,” SP analyst Marko Mrsnik wrote in the report.
“If governments do not change their social protection systems, they will likely become unsustainable.”
If no reforms are adopted, healthcare-related credit downgrades would likely start within three years, eventually leading to an increase in the number of junk-rated countries as of 2020, the study showed.
Healthcare will likely be the fastest-growing expenditure for developed countries,
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