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Aging of the population puts pressure on social costs

By 2049 Belgium will be spending nearly 30% of its national output on social expenditure.  The figure comes from a study commission examining the impact of the aging of the population.  In 2019 social expenditure only totalled 24.5% of GDP.

Expenditure on retirement pensions is set to balloon from 10.5% of GDP to 13.5% over this period.  Health care costs rise from 7.8% of GDP to 10.5%.  Between 2050 and 2070 social expenditure is set to remain stable or fall slightly.

The commission says productivity growth and the employment level will have a major impact on where exactly these figures end up.  If productivity growth doesn’t manage to reach 1.5% and only 1% growth is recorded 31.8% of national output will be needed to afford social expenditure.

Long-term forecasts speak of a 74.6% activity level among 20 to 64-year-olds in 2030.  This figure is markedly under the government’s 80% target.  In order to reach the target many more people will need to enter the labour market.  Reducing unemployment won’t suffice the commission notes.

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