Looming increases in health and pension expenditures, and historically high debt ratios, continue to raise considerable medium- and long-term challenges for many advanced economies, calling for a lasting period of adjustment.
Maintaining deficit reduction efforts over a prolonged period can be a daunting task.
Historical experience shows that advanced economies were generally able to keep their cyclically adjusted primary balance in positive territory for a number of years in the context of adjustment episodes, but on average they did not sustain it for long enough or at a level high enough to generate substantial declines in their debt ratios.5 In the majority of cases, debt ratios stabilized, but remained above the pre-adjustment
episode levels (by 20 percentage points of GDP for the median country).