Scottish fiscal sustainability questions loom large
Published: 10 April 2023
Commentary
Over the next 50 years future Scottish governments could face an average annual budget gap of more than 10 per cent each year.
By Graeme Roy, Professor of Economics at the Adam Smith Business School, University of Glasgow
The Scottish Fiscal Commission (SFC) has just published Scotland’s first Fiscal Sustainability Report.
It highlights how, with rising costs of healthcare coupled with an increase in the average age of our population, demands on spending will run ahead of the funds available to government in the decades to come.
In the SFC’s central projection, over the next 50 years future Scottish governments could face an average annual budget gap – the difference between demand for services and revenues – of more than 10 per cent each year.
Scotland is not alone in facing such challenges. The populations of some countries – including Japan and South Korea – are already falling. The World Economic Forum estimates that in the European Union, the old-age dependency ratio – the ratio of elderly people for every 100 working-age people – will rise from 32 today to 57 by 2100.
Just because it is a common challenge does not mean that we can ignore questions of fiscal sustainability here in Scotland.
Read the full article in The Herald
First published: 10 April 2023