## Fiscal Challenges of Population Aging in Brazil

_IMF Working Papers, April 26, 2017_

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## Bibliographic details
- Authors: Alfredo Cuevas, Izabela Karpowicz, Carlos Mulas-Granados, Mauricio Soto
- Published: April 26, 2017
- Series: IMF Working Papers

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### Summary
- Population has been aging fast in Brazil in recent decades.
- Old age pensions and health-related spending have increased.
- Without reforms, the spending trend threatens to reach unsustainable levels.
- Increasing the retirement age is key, but by itself will not provide sufficient savings to close the pension system financing gap.
- Reforms reducing replacement rates are necessary.
- In health, there is scope for improving expenditure efficiency by:
  - strengthening outpatient care and regional networks, and
  - developing clinical guidelines for cost-effective treatments and drugs.
- Reforms are urgent so that they can be gradual.

### Major Findings on Pensions
- Aging population has driven increases in old-age pension spending.
- Increasing the retirement age is identified as a key reform measure.
- Increasing the retirement age alone is insufficient to close the pension system financing gap.
- Reforms that reduce replacement rates are necessary to achieve sufficient savings.

### Major Findings on Health Spending
- Health-related spending has increased alongside population aging.
- Opportunities to improve expenditure efficiency include:
  - Strengthening outpatient care.
  - Strengthening regional health networks.
  - Developing clinical guidelines to promote cost-effective treatments and drugs.

### Policy Recommendations and Urgency
- Implement pension reforms combining higher retirement ages and lower replacement rates to address financing gaps.
- Pursue health-sector reforms focused on efficiency (outpatient care, regional networks, clinical guidelines).
- Act urgently to allow reforms to be implemented gradually.

*IMF Working Paper: "Fiscal Challenges of Population Aging in Brazil", Alfredo Cuevas, Izabela Karpowicz, Carlos Mulas-Granados, Mauricio Soto, April 26, 2017.*

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_Source: https://www.imf.org/en/publications/wp/issues/2017/04/26/fiscal-challenges-of-population-aging-in-brazil-44850_