Rise in pensions | Hour 25 | Present

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“We are moving from a framework in the pension field that put the emphasis on cuts and austerity to a framework that what it does is guarantee purchasing power indefinitely and at all times,” explained the Minister of Inclusion, Social Security and Migration , José Luis Escrivá, at the press conference after the Council of Ministers in which he confirmed the announcement that Pedro Sánchez had made last weekend in relation to the fact that the Government would approve the increase in pensions this week. A rise that —as announced by the head of Social Security— will be 2.5% in most cases, although for the non-contributory and the minimum this increase will be 3%.

An increase in the income of pensioners that will occur not only this year, Escrivá has assured, but also in successive ones, because from this moment they are already linked to the CPI, and that the minimum single-family pension will be 721.70 euros per month in fourteen payments; the minimum with a spouse is 890.5 euros, the average retirement pension will be 1,116.5 and the maximum will be 2,819.2 euros.

In addition, as Escrivá has announced, pensions are advancing at a good pace towards budget balance since, thanks to the increase in collection – which rose to 132,000 million in 2021, which is 10% more than the previous year and a 6% that, in 2019, prior to the pandemic — and the suppression of what are known as “improper expenses” from the pension piggy bank — in 2021 the State administration has already taken charge of 13,800 million from this pension fund. reserve — the deficit will close at 1% of GDP, which is two tenths less than previously estimated and “in 2022 it will be half, 0.5%”. However, the increase in the amount of pensions means, this year alone, a disbursement of 6,500 million more.

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“This is sustainable but things have to be done to keep it that way. At this time, what the Government has prioritized in the agreements with social agents is the revaluation of pensions to maintain purchasing power. This is normal in Europe, what our environment has is a mix of revaluation of pensions with CPI and salaries, and salaries grow more than the CPI, I mean, this is normal in Europe. What is certain is that this increase of 6,500 million that is going to take place next year has to be financed, and they have to be financed so that they can be produced. In the short term it is sustainable, but measures must continue to be taken, as it seems that they are being taken” says Valero.

The IMF cuts its growth forecast to 5.8%

The year begins with worse than expected economic prospects. And that translates into a reduction in forecasts for most countries in the report that the International Monetary Fund has just presented. Omicron, persistent inflation and supply shortages will slow growth this year.

And precisely that inflation This is the reason that leads the Fund’s chief economist, Gita Gopinah, to point out that “some central banks have begun to raise interest rates to anticipate inflationary pressures” although, Gopinath clarified, “communicating well the transition towards a more restrictive policy is key to ensure that the market reaction is orderly”

“The positive thing is that the IMF, for once, is going at the same level as the market, it normally makes these corrections six months later, when everyone already knows that the economy has slowed down. Our reading of this is a acknowledgment that we have a few bumps along the way, but that they are of a temporary nature: both the conflict that we potentially have in Ukraine and the impact of Ómicron” explains Francisco Quintana, Director of Strategy at ING Spain, in Hora 25 de los Negocios.

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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