Link Securities| The risk rating agency Moody’s estimates that the Spanish Social Security deficit “will increase significantly” over the next two decades in the absence of new adjustment measures as a result of the ageing of the population and higher spending on pensions that involves linking their rise to inflation, which could negatively affect Spain’s credit rating, currently at “Baa1” with a “stable” outlook, according to the newspaper Expansión on Wednesday.
Specifically, Moody’s estimates that, without additional measures to those already adopted, the deficit of the Social Security system will increase to 1.4% by 2030 and to 3.2% by 2040, compared to 0.5% in 2022. Moreover, it forecasts that this negative balance will not start to shrink until the end of the 2040s, when it will reach a maximum of 4% of GDP, even exceeding the expected deficit for all levels of government in 2024 of 3.2%.
