Report on the Long-term Sustainability of Public Finances (April 2020)

30. 4. 2020

The long-term sustainability in 2019 was not achieved. The long-term sustainability indicator reached 4.2 % of GDP and thus the risk of public finances becoming unsustainable in the long run increased, but remained in the medium-risk zone.

The long-term sustainability of public finances worsened for the third year in a row. Compared to 2018, the long-term sustainability indicator worsened by 2.6 % of GDP; the measures adopted by the government and parliament had the most adverse impact (1.7 p.p.). The legislative changes adopted in the pension system worsened the indicator by 1.3 p.p. They mainly include the introduction of a the retirement age cap, increase of the minimum pension level, and lower cuts in pensions payable from the pay-as-you go pillar to pensioners participating also in the fully-funded pillar, which will increase the pension system’s deficit by 2.7 % of GDP by 2069.