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Romanian govt to hike pensions by 12.5% from January -ruling coalition

22 Tháng Mười Một 2022
Romanian govt to hike pensions by 12.5% from January -ruling coalition
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BUCHAREST (Reuters) - Romania's ruling coalition will hike state pensions by 12.5% from January and make cash payments to low-income pensioners throughout the year to help the country's most vulnerable cope with surging inflation, party leaders said late on Monday.

The cash payments will vary in size for pensions under 3,000 lei ($622.55) per month, the leaders of the three governing coalition parties agreed.

In addition, pensioners with under 1700 lei per month will receive social vouchers worth 250 lei every two months, a measure first approved this year.

An additional payment worth 1400 lei as specific aid for energy bills will be distributed in two tranches for Romanians over 60 years old with pensions under 2000 lei.

"The period we're going through is one marked by multiple global crises and we must ensure a cushion for the effects of high inflation," Liberal Prime Minister Nicolae Ciuca said.

The support package will cost 26.65 billion lei ($5.53 billion), the leader of the leftist Social Democrats Marcel Ciolacu said, and will include indexing child benefits and income for veterans and war widows with the inflation rate.

The monthly gross minimum wage will also rise to 3000 lei from 2550 lei currently, a move which should benefit 1.2 million Romanians.

The European Union state collects budget revenue worth around 30% of gross domestic product, significantly below the EU average of roughly 46% of GDP, and spends most of it on public sector wages, pensions and subsidies.

The government will target a consolidated budget deficit of 4.4% of GDP from this year's estimated 5.7%, and the European Commission, the International Monetary Fund, Romania's central bank and ratings agencies have warned that the fiscal deficit and low revenue collection were a main risk to the economy.

Fitch Ratings, Moody's (NYSE:MCO) and S&P Global (NYSE:SPGI) Ratings have Romania on their lowest investment grade. Analysts expect economic growth to markedly slow down in 2023.

($1 = 4.8189 lei)

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