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Belgrade – Economists expect that under the current “Swiss formula”, the increase in pensions next year should be four to six percent.
Source: Tanjug
Photo: Depositphotos / faustpr
With the current “Swiss formula”, pensions should increase by between five and six percent in January, Milojko Arsi, a professor at the Faculty of Economics at the University of Belgrade, told Tanjug today.
“If your Swiss formula is kept, we can estimate what the wage growth will be this year, what the inflation will be and based on that it follows that pensions should increase, say, about five percent, and maybe six percent.” , said. is he.
He added that he believes that under current circumstances the increase would be justified to be less.
“We do not have wage growth in the private sector this year, we probably will not have it in the public sector, this year or next. Due to the crisis, it is justified to have a smaller increase, say three percent, and to increase pensions in the future, “he added. he said.
Arsi believes that the improvement of the Swiss formula should go in the direction that pensions grow a little faster in periods of economic growth than what the standard Swiss formula allows, and that in periods of crisis they grow a little slower.
“The Swiss model is a good basis for adjusting pensions according to economic opportunities, and its change should go in the direction of better harmonization with the movement of the economy,” he said.
He adds that the “Swiss formula” should not be corrected in any way so that it provides a very high pension growth that would ensure the achievement of the goal set by the Serbian Government that the average pension is 440 euros in 2025.
He assesses this goal as unrealistic even before the existing crisis, and says it is even more unrealistic now because it means pensions are growing by 13 percent on average every year.
“No one has made pensions grow faster than the economy. And the economy can grow at an average of around five percent at best. Some additional growth may be achieved based on the strengthening of the dinar. “, said.
Arsi believes that it would be a success if the average pension in Serbia was around 300 euros in 2025.
Earlier today, in a statement to Tanjug, a member of the Fiscal Council, Nikola Altiparmakov, estimated that pensions could be increased by about four percent using the “Swiss model.”
By the way, the Swiss formula implies that pensions are adjusted to 50 percent relative to inflation and 50 percent relative to average wage growth.
“It would not be economically justified to end that, given the crisis,” Altiparmakov added on the occasion of the announcement by Serbian President Aleksandar Vui that pensions would be increased, and not insignificantly.
Finance Minister Sinia Mali previously said that one of the topics of the meeting with IMF representatives in October would be the refinement of the Swiss pension growth model.
Altiparmakov believes that the current formula does not necessarily have to be improved, and that it is now economically viable.
He also says that if the Swiss formula applies now, in times of crisis, it should apply even when the crisis has passed.
He explains that its application now allows in times of crisis a greater growth of the standards of pensioners in relation to the growth of the labor force due to the current situation of the labor market due to the pandemic.
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