Brussels warned today that demographic aging is a challenge for Portuguese public finances, estimating that the elderly dependency ratio in Portugal could reach 62,8% in 2050, the highest among Member States.
In the specific report on Portugal, associated with the communication released today as part of the spring package of the European Semester, European Commission technicians defend the need for the country to ensure the sustainability of public finances and the efficiency of the public sector as the population ages. .
«Demographic aging represents a challenge for Portuguese public finances. Expenditure related to aging in pensions and health should become a decisive factor for Portugal's budgetary sustainability», can be read in the report.
The European Commission points out that «an increasingly aging population, a low fertility rate, a declining net migration and a population of working age» are expected to almost double the dependency ratio of the elderly in Portugal, that is, the proportion from beneficiaries to contributors in the pension system by 2050.
Estimates suggest that the ratio «could reach 62,8%, the highest» among the Member States of the European Union (EU).
Brussels warns that this scenario translates into an increase in pension expenditure in the medium term, but also in the long term.
“Previous reforms of Portugal's pension system have helped to strengthen its long-term sustainability. However, the current early retirement rules, which have been extended consecutively since 2017, and the recurring discretionary pension increases are expected to have a lasting negative effect on Portuguese public finances», it can be read.
In the report, Brussels also suggests that, in addition to the reforms and investments foreseen in the Recovery and Resilience Plan (PRR), Portugal would benefit from improvements in water management and environmental protection, to strengthen resilience against the effects of climate change, as well as in the waste management and reduce “further dependence on fossil fuels” and energy consumption in the transport, buildings and industry sectors.
It also points to benefits with a «greater deployment of wind and solar energy, including 'offshore' and decentralized production, and strengthening of electrical interconnections and the electrical grid», as well as an improvement of "green skills", through targeted qualification programs or upgrading, to facilitate the deployment of renewable energy and energy efficiency measures.
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