This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

S&P: Age-Related Spending Reforms Help Restore Sovereign Fiscal Sustainability; Emerging Markets Not Immune To Aging Pressure

Although aging-related costs are often viewed as a problem faced primarily by wealthier sovereigns, Standard & Poor's analysis suggests that the problem may be almost as pressing for emerging market sovereigns.

For the 2013 Report, supporting data is available interactively on the Web and via an iPad app. Comparisons with various groups – such as emerging economies and AAA-rated countries – are also available. Links can be found at  Users may also interact with the supporting data on iPad by downloading the free CreditMatters app available by searching "S&P Ratings" at the Apple App Store or by visiting

The 2013 Report includes simulations of hypothetical long-term sovereign ratings credit metrics under various scenarios:
  • The "No Policy Change" scenario, in which nations take no measures to plan for aging populations
  • The "Balanced-Budget" scenario, in which budgetary adjustments result in a balanced budget in 2016 for all sovereigns
  • The "No Aging" scenario, in which government legislation fully contains future increases in age-related spending over the projection period
  • The "Lower Interest Rate" scenario, in which a 2% interest rate prevails over the study period rather than 3% in the no-policy-change scenario
  • The "Higher GDP Growth" scenario, in which GDP growth is increased by 1% across the projection period.

To demonstrate the scale of the challenge, by 2050 under a "No-Policy-Change" scenario nearly 60% of the sovereigns analyzed in the 2013 Report would have credit metrics that Standard & Poor's currently associates with speculative-grade sovereign credit ratings, against 20% currently--even though their finances have improved since the 2010 report.

As in previous reports, the 2013 Report also notes that Standard & Poor's does not predict the "No-Policy-Change" scenario will actually unfold, given the low likelihood that governments would allow their debt burdens to increase without enacting policy reforms. In fact, the 2013 Report shows some improvement to date from reform efforts enacted since 2010.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $92.69 -0.59%
FB $119.49 1.40%
GOOG $711.11 1.40%
TSLA $214.84 1.60%
YHOO $37.23 0.79%


Chart of I:DJI
DOW 17,740.63 +79.92 0.45%
S&P 500 2,057.14 +6.51 0.32%
NASDAQ 4,736.1550 +19.0610 0.40%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs