Long-Term Spending Pressures in Liechtenstein

Liechtenstein faces long-term fiscal pressures from population aging, climate transition, and enhanced security requirements. Using a Marginal Abatement Cost Curve framework, cohort-component demographic modeling, and cross-country benchmarking, staff estimates cumulative annual spending pressures of approximately 3½ percent of GDP by 2050—climate mitigation and adaptation (1.7 percent), pensions (1.5 percent), and security (0.3 percent). Liechtenstein's strong fiscal position—consistent surpluses, near-zero public debt, and substantial net assets—provides space to address these pressures. Systematic integration of long-term projections into budgetary frameworks through regular sustainability assessments and independent evaluation would strengthen transparency, intergenerational equity, and fiscal credibility.