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Pensions are rising, but price hike continues

Bulgaria retirees start 2022 with higher pensions and financial support over Covid

Photo: BGNES

The last month of 2021 was a good month for two million retirees in Bulgaria. At Christmas, their pensions were recalculated. Prior to the amendment, a percentage of 1.2 for each year of service was applied when calculating a pension, but it was raised to 1.35% per year, so that the rise from December 25 reached an average of 12.5%. This has been the first recalculation of pensions since 2008 and now the minimum one has become 185 euros and the maximum 750 euros a month. In December, it was also decided that by June next year, the elderly would receive an additional 30 euros each month to their basic pension as support related to the Covid situation. In addition, every retiree who is vaccinated with a booster dose would receive a one-time bonus of 38 euros. All this shows that pensioners have not been forgotten and that the authorities have been trying to do what they can to make their lives a little bit easier. Not coincidentally, the ambition of the new government is that no pensioner should receive incomes below the poverty line, which rises from a level 180 to 207 euros this year.

Despite the good news, the concerns of retired Bulgarians have been growing because of the rapid rise of inflation and the significant rise seen in the prices of almost all goods and services. Silently or after public announcement, energy, food, transport, telecommunications, medicines, etc. have all become more expensive. Stunned by the price shock, the government resorted to a rather extreme and controversial measure - it froze the prices of electricity, heating and water for households until the end of March.

Retirees who are the most affected by the rising prices received a breath of air and are probably grateful for the temporary postponement of the inevitable thing that will have to happen one day - the return to market prices. However, similar measures have not been applied to other goods and services and annual inflation of 7.3% was registered in November. So far, it is lagging behind pension growth, but a number of experts believe that in reality real inflation is far higher and stands at over 10 percent. They add that in a country with a currency board and where the central bank does not pursue anti-inflation policies, the inflationary processes cannot be completely controlled. This was what economic expert Prof. Gancho Ganchev said in an interview with Bulgaria ON AIR TV. According to Vasil Velev, president of the Bulgarian Industrial Capital Association, "there will be a rise in inflation, which will reach double digits." This is really alarming and threatens the already low purchasing power of pensioners in this country, who are one of the most vulnerable social groups and find it difficult to cope with any price hike. 1,044,000 people, which is half of Bulgarian retirees receive the minimum pension of 185 euros a month.

Whether the society and the authorities would remain generous to the Bulgarian pensioners this year is not very clear and everything would depend on the economic situation and revenues in the country's budget. Currently, it is known that on July 1 this year there will be a new pension hike by at least 6%. It remains yet to be seen whether inflation and rising prices would have melted this rise in advance, as many experts forecast.

English: Alexander Markov
Photos: BGNES
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