OECD urges Hungarian policy change
- Hungary should focus its efforts on inclusive reforms, such as overhauling public pensions and the healthcare system, the OECD has urged.
Although the Hungarian economy is growing – driven by high employment levels – a shift in government policy is needed to ensure green growth and better social benefits, the Paris-based organisation said in its latest Economic Survey of the country.
The survey highlighted that public spending on pensions is putting pressure on public finances – despite being one of the lowest in the OECD.
Spending on public pensions is expected to account for around 9% of the country’s GDP by 2020, increasing to 11.2% by 2070. And this could rise by as much as a further 4% of GDP if economic growth is weak or if people live longer than projected, the report added.
“Ageing will weigh on public finances and create challenges for service provisions,” the OECD stated, adding that raising the retirement age to 65 – from 62 currently – by 2022 could help address the pressure on public finances. It also called for the retirement age to be raised to 70 by 2027, to further cover the cost of the ageing population.
Read more @Public Finance International
