France’s retirement system is set to run larger-than-expected deficits from 2045 when the falling birth rate starts weighing on the system’s finances, the pensions advisory council said on Thursday.

The council’s annual update said the outlook was largely unchanged from last year until 2045, but a recent downward revision to the fertility rate worsened the picture after that.

As a result, the gap between contributions and payouts is now expected to reach 2.4% of GDP by 2070, a full percentage point higher than estimated a year ago.

The update was based on fresh long-term population estimates from the national statistics agency, which expects the fertility rate to fall to 1.45 children per woman from 1.8 previously.

The deteriorating outlook is bad news for France’s public finances, which last year included 422 billion euros ($486 billion) in pension spending, or 14.1% of economic output, the second highest share among advanced economies after Italy.

The council said raising the retirement age is the only non-recessionary fix as every other lever, such as cutting pensions or hiking contributions, weighs on growth. Only working longer actually grows the economy.

Higher immigration could help short-term finances, but migrants eventually retire too, merely delaying the financial reckoning by a decade.

The report is likely to fuel debate about pension reform, which is set to be one of the major political battlefields heading into the April 2027 presidential election.

To ease opposition to its 2026 budget, Prime Minister Sebastien Lecornu’s government agreed last year to suspend a deeply contested 2023 pension reform that gradually raises the legal retirement from 62 years – among the lowest for advanced economies – to 64.

—

(Reporting by Leigh Thomas;Editing by Elaine Hardcastle)