## Ensuring Fiscal Sustainability in G-7 Countries

_IMF Working Papers, July 1, 2007_

## Source details

**Canonical URL:** [Ensuring Fiscal Sustainability in G-7 Countries](https://www.imf.org/en/publications/wp/issues/2016/12/31/ensuring-fiscal-sustainability-in-g-7-countries-21100)

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## Bibliographic details
- Authors: Daniel Leigh, David Hauner, Michael Skaarup
- Published: July 1, 2007
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451867510.001

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### Summary and context
- Rising longevity, falling fertility rates, and the retirement of the baby boom generation will substantially raise age-related government spending in most advanced and many emerging market countries.
- The paper assesses the evolution of fiscal sustainability for each of the G-7 countries using two standard primary gap indicators.
- The estimated fiscal adjustment required to ensure long-run fiscal sustainability is substantial for all G-7 countries.
- Ensuring fiscal sustainability would require an average improvement in the primary balance of about 4 percentage points of GDP.
- There are significant growth benefits to putting public finances on a sustainable footing in the near term versus delayed adjustment.

### Key findings (empirical and quantitative)
- The study uses two standard primary gap indicators to assess fiscal sustainability across the G-7.
- The average fiscal adjustment needed across G-7 countries is about 4 percentage points of GDP in the primary balance.
- The paper emphasizes that required adjustments are substantial for each G-7 country (no per-country numeric breakdown provided on the landing page).

### Policy implications and recommendations
- Advance near-term fiscal consolidation to secure long-run fiscal sustainability and capture significant growth benefits relative to delayed adjustment.
- Focus policies on managing age-related government spending pressures arising from demographic shifts (rising longevity, falling fertility, retirement of baby boom generation).
- Use primary balance improvement as a target metric to gauge necessary fiscal adjustments.

### Methodology notes (as described on page)
- Fiscal sustainability is evaluated using two standard primary gap indicators (the landing page identifies the indicators but does not detail them).
- The analysis is presented for each of the G-7 countries.

### Publication metadata (as provided on the page)
- By Daniel Leigh, David Hauner, Michael Skaarup
- July 1, 2007
- Pages: 29
- Series: Working Paper No. 2007/187
- DOI: https://doi.org/10.5089/9781451867510.001

*Ensuring Fiscal Sustainability in G-7 Countries, Daniel Leigh, David Hauner, Michael Skaarup, IMF Working Paper No. 2007/187 (July 1, 2007).*

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/ensuring-fiscal-sustainability-in-g-7-countries-21100_