Every country following a capitalist model has factored in continuing economic growth when calculating their public spending - the extra revenue brought into the treasure from increased corporation tax, increased revenue from better paid employees as tax, the extra tax from more people being employed by successful and expaning companies, have all underpinned forecasts for public spending.
If countries can no longer rely on continuing economic growth to pay for their growing public spending commitments, some radical rethinking of both public spending targets and the means to generate the revenue need to be found.
A stagnant economy has other more indirect effects too. Such a forecast discourages investment by companies into their capital needs, or their training or employment needs either, for that matter. A stagnant economy also acts as an anchor on spending by the public, who tend to prefer to pay down debt and save, thus depressing the retail sector and all those companies that service the retail sector.
All in all, if the prospect for the next few years or even decade is for a stagnant economy, thats a gloomy prospect for everyone.....