Romania's Senate passed on November 14 the government's draft law on the public pension system, according to which the pensions of over 4.7 million beneficiaries are to be recalculated according to a new formula, Bursa.ro reported.

The project will also be debated by the Chamber of Deputies, the decision-making body in this case.

The pensions will increase on average by 40% when the updated pensions are first disbursed in September 2024, according to estimates of the bill's author, the Labour Ministry.

The IMF reportedly warned Romania to amend the bill, as it would negatively impact 0.5% of GDP in 2024 and 1% of GDP in 2025.

The Liberal Party (PNL), which eventually endorsed the bill, estimated a 3%-of-GDP impact in 2025 – but the ruling coalition, including the Social Democrats, also pledged to improve tax collection and finance the public pension budget's wider deficit. 

iulian@romania-insider.com

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