Ireland faces a surge in the number of older people as a proportion of the population, falling tax revenues and increased fiscal deficits, according to a new report by the Department of Finance.
The study says that without remedies the deficit could reach a significant 8% of national income driving the country's borrowing to almost 150% of the size of the economy or €117,000 per head in 40 years.
It warns if the debt reaches this level it would "considerably hinder the State’s ability to respond to crises or deliver public services and investment".
The report called Future Forty outlines potential scenarios between now and 2065.
The stark projections are consistent with the long-term trajectory across many advanced economies.
At present there are 116 people in the labour force in Ireland for every 100 not working.
By 2065 there will be 98 workers for every 100 not working.
The report says there will be a "stagnating labour force suppressing economic growth".
It says: "Continued inward migration will be vital to maintain growth in the labour force."
By that time almost half of the State's expenditure will be on age-related spending including healthcare, long term care and pensions.
Watch: Paschal Donohoe outlines how he will address issues raised in Dept of Finance study
The report also warns about the impact of debt servicing costs and spending to deal with climate change absorbing increasing amounts of expenditure.
In extreme scenarios climate measures could represent 3% to 4% of national spending as more extreme weather events wreak economic damage and require a response from the State.
It also says the proportion of windfall tax receipts will fall significantly between 2030 and 2040.
The report says over the last 30 years Ireland has enjoyed economic growth of 143% but it indicates the days of remarkable expansion are numbered.
It projects growth will increase by a much lower 53% over the next four decades.
On housing, the report predicts that demand for homes is expected to moderate in the next ten years with supply pressures "easing significantly by the 2040s".
The reports notes the current Government is committed to building 300,000 by 2030 and assumes housing supply will reach 60,000 that year.
"Changing demographics and household preferences imply a need for smaller units suitable for fewer occupants."
The report says deglobalisation or international companies retrenching to their home countries represents a "serious risk" to Ireland.
On EU expansion it says there are ten candidate countries seeking to join the EU which would result in the population of the bloc rising by 140m.
The report outlines a number of scenarios for growth in the population reaching between 5.9m and 7.9m by 2065 depending on immigration and fertility rates.
