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Hungary plans new rules to control deficit of pension system

The government has been planning to raise the age limit for early retirement by one year to 59 for women and keep the current 60-year limit for men from 2009, Labor Minister Péter Kiss said at a press conference yesterday. “We'd like to achieve that people who are able to work would remain active as long as possible, depending on their health,” Kiss said. “We should bring the age of actual retirement closer to the official retirement age limit.” Hungarians now retire at the age of 57 to 60 on average instead of the official retirement age limit of 62, Kiss said. The deficit of Hungary's pension system, currently 2.1% of the country's GDP, will grow to about 5% by 2050 without regulatory changes, the minister said. The government wants to approve new rules on the employment of pensioners and is planning to change the system of granting disability pensions, Kiss said. Currently 450,000 people receive disability pensions.  

The Hungarian government’s latest euro-adoption plan forecasts Hungary's budget deficit by EU standards will decline from 10.1% of GDP this year to 4.3% in 2008 and 3.2% in 2009. The government faces a major challenge in enacting fiscal and structural changes, including an overhaul of the health care system and education, ratings company Moody's Investors Service said yesterday. Edward Parker, director of sovereign international public finance at Fitch Ratings Ltd. in London, also said yesterday he doesn't expect Hungary to adopt the euro before 2014 because of the “sheer size” of the budget deficit. (Bloomberg)