S&P Warns Some G20 Nations Face Downgrade Unless Reforms To Stem Rising Health Care Costs Enacted
“Ratings agency Standard & Poor’s warned it may downgrade ‘a number of highly rated’ Group of 20 [G20] countries from 2015 if their governments fail to enact reforms to curb rising health care spending and other costs related to aging populations,” Reuters reports. “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, S&P said in a report,” the news agency writes (Hopfner et al., 1/31).
“Policymakers and investors have long been aware that aging populations threaten the sustainability of government finances in many developed nations, as the costs of providing pensions and health care rise and the working population shrinks,” and while some governments have acted to alleviate the budgetary impact of increasing pension costs, “few have attempted to reform health care provision to achieve the same goal,” Dow Jones/Wall Street Journal reports. “S&P said that without any change in policy, it would start to cut its ratings of developed-country governments from 2015, moves that would affect ‘a number of highly rated sovereigns,'” the news agency writes (Hannon, 1/30).