The independent Fiscal Responsibility Authority (Airef) has partially amended the pension reform approved in phases by its former president, José Luis Escrivá. The body chaired by Cristina Herrero has warned that the regulations in force will increase the deficit and debt in the next 25 years. These are not enough measures to guarantee the sustainability of public finances, since the increase in income does not compensate for the increase in spending, the auditing institution has warned.
The latest pension reform is barely a few days old, but Airef has been forceful this Friday when evaluating the Executive decree pending validation in the Congress of Deputies that puts the icing on the cake of the changes that have been introduced from 2021. For the independent authority, the approved measures will cause an increase in the deficit of 1.1 points of GDP in 2050 and one point in 2070.
Specifically, the scenario drawn by Airef indicates that the changes introduced will cause an increase in pension spending of 2.4 points in the year 2050. Income, for its part, will rise by barely 1.3 points. In 2070 expenses would increase by 2.3 points and income by only 1.3 points.
The greatest expense in pensions in the next 25 years is concentrated in their revaluation with the CPI; will mean an increase of 2.7 points in GDP in 2050. The elimination of the sustainability factor, which is linked to the evolution of life expectancy, will cause, for its part, an increase in spending of 0.8 points that same year , while the incentives for early retirement will barely reduce it by another eight tenths. On the income side, the reform of the self-employed is the most significant, since it will increase them by 0.5 points, always thinking of that year 2050.
In conclusion, Airef contemplates a progressive increase in pension spending that would reach 16.2% of GDP in 2050. It would be the high point, according to . In 2070, due to demographic evolution, it would fall to 13.9%.
This situation, added to greater spending on health and dependency due to the progressive aging of the Spanish population, would cause the debt to reach 147% of GDP in 2050 and 186% in 2070. Airef estimates that the 1930s will mark a turning point for the debt, giving way to an upward and accelerated path.
The agency estimates that health spending will increase one point of GDP between 2021 and 2050, while dependency will increase by 0.9 points in the coming years. Expenditure on education, for its part, will fall by 0.8 points in the next 25 years.
The main conclusion of Airef is that the pension reform is insufficient and that, therefore, more forceful action must be taken to comply with the sustainability of public finances when fiscal rules are recovered. The president of the supervisory body has asked for speed "to give us an idea of the adjustment that we are going to have to make." “The importance of acting as soon as possible, since the sooner we act, the less adjustment we will have to make”, she added.
