Johannesburg- An ageing population will place pressure on economic growth and public finances and can influence the country's credit rating, according to a report by S&P Global Ratings.
S&P studied 58 countries, representing 70% of the world's population, for its analysis on the cost of ageing. It suggests that South Africa’s old-age dependency ratio will rise to 15% in 2050, up from 7.7% in 2015. The report stated that an ageing population will drive demand for public health care and long-term care services and state pensions. S&P believes that South Africa’s age-related spending will double.
“An ageing population forces a burden on the economy,” said Rob Price, economist from Investment Solutions. If people do not have a private pension, they will likely claim for grants, which becomes a cost to the government, he explained.