July 29, 2021

Spending on pensions will skyrocket in Galicia, Asturias and Castilla y León

Spending on pensions will skyrocket in Galicia, Asturias and Castilla y León


MADRIDUpdated:

Closer to a dystopia than to utopia, Spain in 2035 will be a gerontocracy in which the number of people who live alone, with more supermarkets and fewer bars and in which the northern regions will be depressed by this aging will skyrocket. Far from forming a replica of "Blade Runner", these conclusions show the latest report of the rating agency Moody's on the aging population of our country, to mark «Especially vulnerable» the prospects for Asturias, Castile and León Y Galicia, the regions in which spending on pensions, health and dependency associated with aging will shoot with greater force in the coming decades.

In these three communities, 25% of the current population is over 65 years old, a percentage higher than 19% on average throughout Spain. The population that is over 65 years of age will represent more than 31% in 2040 according to Moody's, which will impact the public coffers of the communities, in which 50% of the expenditure is destined in 50% of Health and Dependency, remember the vice president and senior analyst at Moody's, Antonio Tena. Where less aging will be in Barcelona, ​​Madrid and the Mediterranean regions, says Moody's. Cantabria, Basque Country Y The Rioja are the other most vulnerable after Asturias, Castilla y León Y Galicia.

The other administration that will fear this accelerated aging will be Social Security, whose situation worries the agency. «The Social Security deficit of 2017 was 1.4% of GDP, about half of the total. And the Reserve Fund is almost exhausted», Notes Tena. A scenario that will be aggravated by the higher pensions of new retirees and the fact that they are becoming more, at a time when the unemployment rate still flies above 15%, which stresses the ratio between contributors and retirees.

Estimates questioned

Moody's takes data from the latest report of the European Commission "Ageing report" and draws a society that will change strongly as the generation of the «Baby boom», the 14 million Spaniards who were born between 1958 and 1977, begin to retire from 2023. These demographic estimates have been branded as pessimistic by organizations such as the Fiscal Authority that regret that the expected improvement of the market is not taken into account. labor and the arrival of migration, which the institution figures at 8.6 million until 2050 that will rejuvenate the national population pyramid.

With EU data reminiscent of Moody's, the replacement rate -ratio between the last salary and the first salary as a pensioner- from the current 80% to 50% in Spain until 2070, the biggest fall in the euro, although the pension will still be higher than in the surrounding countries -Now only France exceeds in percentage to Spain-.

House prices will fall

But this gerontocracy lurking will also have strong social consequences in Spanish society, which will see how buys more in neighborhood stores and leaves less of terraces. Moody's notes that consumption in neighborhood supermarkets will increase strongly, but will plummet in hypermarkets and shopping centers. It will also fall in restaurants and bars: those over 65 eat away from home 40% less than the rest.

Likewise, mortgage-backed securities will also go down: the imbalance between the elderly and the young will be rescheduled, according to Moody's, in the supply and demand in the housing market. There will be more supply of sellers over 65 who demand from young buyers, which will lower prices, especially in non-urban areas. Nail 200,000 homes will be transmitted in inheritance every year since 2030, according to Moody's. And along with it, another chilling fact: every time there is there will be more elderly people living alone and by 2020 they will exceed two million.

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