Long-term Prospects for Public Finances in Austria
Future demographic changes, in particular the increasing the older population, will have a significant impact on the public households. This study examines the impact of demographic change on public spending in the areas of pensions, health, education, care and the family, taking into account existing legal frameworks. The results depend to a large extent on certain framework conditions, such as the future development of productivity. In any case, the transition of baby boom cohorts from employment to retirement age, as well as the increase in life expectancy and the consequent increased use of health and care services, will lead to an increase in (public) social expenditure. The current low-interest environment, which is likely to persist for a number of years, is helping to dampen the burden on the public households from the rise in social spending. In the medium term, the government debt ratio will continue to fall, while primary deficits, interest expenditure and government debt are likely to increase again in the long term.