PARIS (Reuters). – The cost of repaying debt that was raised in order to aid households and business through the COVID-19 Crisis will be negligible compared with the costs of long-term trends, such as funding pensions and healthcare services.

Organisation for Economic Cooperation and Development analyzed the economic outlook to 2060 and concluded that governments will have to deal with increasing costs of public services and aging populations.

This is in addition to the enormous COVID-19 debts that will be difficult to pay.

Many wealthy 38 member countries of the Paris-based OECD witnessed their budget deficits rise to unprecedented levels as they propped their economies up during the Pandemic.

The report stated that if current interest rates remain historically low, many OECD countries would be able to add to their debt to help cover additional strains on their finances.

The OECD estimated that fiscal pressure in the median OECD-country could rise to 8 percentage points of their GDP by 2060 because governments are trying to preserve current benefits and standards for public service.

This increased stress on the public finances was most evident in Slovakia (17%), followed by Spain (14%) and Spain (13%) and France (12%) respectively.

The OECD stated that a 1 percent increase in global interest rate from their current low levels could raise fiscal pressure to as high as 1-1.5% for countries with high debt such as Japan, Italy, and Greece.

For fiscal relief, there were few options for countries other than to adopt reform packages that boost employment. This would increase per-capita GDP.

It could improve living standards by just 7% in 2060. Meanwhile, countries who are most likely to reform – indicated by the OECD by France, Italy and Belgium – might see gains between 9-10%.

The report estimates that such packages could reduce fiscal pressure by 1.75 percent of GDP in 2060 for the median OECD nation.