Fiscal Sustainability Report 2026

Population developments in the coming decades are characterised by increasing life expectancy, combined with lower birth rates and lower net migration compared with recent decades. Lower birth rates initially reduce public expenditure as a share of GDP. Over time, however, a rising share of older individuals in the population leads to higher expenditure. At the same time, increasing life expectancy is assumed to be accompanied by a higher exit age from the labour market, which strengthens public finances.

Net lending in the public sector improves gradually up to 2035 and is clearly positive at that point. In the latter part of the period, however, rising expenditure associated with an ageing population leads to a weakening of net lending, which eventually turns negative. Despite this, the National Institute of Economic Research assesses public finances in the baseline scenario to be sustainable in the long term. This assessment is based on the fact that neither the net financial position nor Maastricht debt shows a persistent deterioration over the projection period.