Christine Lagarde, managing director of the International Monetary Fund
The world's financial watchdog, IMF, has warned of a potential crisis among advanced economies as the baby boomers retire. This is simply because an expanding pensioner population has to be supported by a dwindling workforce.
The organisation is warning considering that the issue is critical because pensions and healthcare costs are paid for by taxes levied on the income an economy generates. A shrinking labour force relative to the population can lead to higher taxes and lower benefits.
According to the international body, policies to encourage immigration and deter retirement may be needed in wealthy nations to deal with the looming challenges of an ageing population.
The IMF said in its World Economic Outlook report:
“Because older workers participate less in the labour market, the ageing of the population could slow growth and threaten the sustainability of social security systems.”
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