Bulgaria: Selected Issues

International Monetary Fund

No 2024/164, IMF Staff Country Reports from International Monetary Fund

Abstract: This Selected Issues paper focuses on the Bulgarian pension system. The paper provides an overview of the pension system and describes measures taken in the last decade to increase its financial sustainability. It highlights how the measures taken during and after the Coronavirus disease 2019 (COVID-19) pandemic structurally affect the financial sustainability of the pension system. The paper also shows that the recent measures compound the long-term pressure related to an aging population. It also details policies that could contain the projected increase in pension spending. During the COVID-19 pandemic, the Bulgarian authorities increased pensions substantially to support pensioners’ living standards and aggregate demand. These increases have become permanent and improved the adequacy of pensions. However, not matched by revenue measures, they have widened the deficit of the pension system. Reforms that increase the incentives to contribute to the pension system and thus revenue would improve the financial sustainability of the pension system and reduce fiscal risks.

Keywords: GVC Integration; IMF staff calculation; return on assets; GVC participation; EU country; current ratio; Pension spending; Pensions; Aging; Exports; Public enterprises; Global; Europe (search for similar items in EconPapers)
Pages: 58
Date: 2024-06-13
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