Economy of Georgia

PM: We won’t Raise Pensions by 2017

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გიორგი კვირიკაშვილი Photo: მთავრობის ადმინისტრაცია

At a Parliamentary meeting today, Prime Minister of Georgia, Giorgi Kvirikasvili stated that the budget for pensions isn’t going to rise by 2017. According to the Prime Minister, pension reform will begin in 2018, which will aim to address pension growth in accordance with inflation.

“We’re not planning to raise pensions for the 2017 budget. We don’t have anything to hide and we’re not planning to lie, this is the reality. Starting in 2018 we will have a new pension system, indexation system, which will aim to bring pension growth in accordance to inflation. We refrained from unrealistic promises in the pre-election period”, says Kvirikashvili

Pension indexation in accordance with inflation means that pensions will rise in parallel with inflation. The Monetary Fund of Georgia forecasts inflation to rise by 3% by 2017, which would mean that pensions would rise by 5.4 GEL (3% of 180 GEL = 5.4) By 2018, it is expected that inflation will have reached 4%, raising the monthly pension to 188.5 GEL.

According to research carried out by the Ministry of Economy, pension indexation can be based on inflation, economic growth or the growth of average salary. According to the Ministry of Economy, pension indexation will improve the effectiveness and importance of pensions in terms of fighting against poverty.

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