By Dimitris Katsaganis

Based on an “equation” with two “unknowns” the rate of increase in all main pensions will be calculated on January 1, 2023.

The first “unknown” is growth rate and growth rate of the consumer price index (inflation) this year.

According to the existing institutional framework the rate of increase of pensions will be judged by half of the growth rate of the Greek economy and the other half by the rate of price increase.

Both her latest estimates Commission (February 2022), as well as those of him IMF (April 2022), “show” a 4% increase for the main pensions of January 2023, which will be paid earlier, ie before Christmas 2022.

This is because the Commission estimated GDP growth of 4.9% and inflation of 3.1%.

However, these estimates, which were issued in early February, apparently did not take into account the dramatic consequences of the Russian invasion of Ukraine at the end of the same month. Based on these estimates, a 4% increase is evident.

This 4% increase, however, also results from the IMF estimates, which, as issued this month, have also taken into account the forecasts from the consequences of the war in Ukraine. In particular, it forecasts lower growth (3.5%) compared to the Commission (4.9%), but higher inflation (4.5% vs. 3.1%).

More specifically, it is reminded that based on the Katrougalos insurance law, which is in force since May 2016, “the total amount of the pension paid is increased from 1.1.2017 per year by a joint decision of the Ministers of Finance and Labor, Social Insurance and Social Solidarity based on a rate of 50% from the change in GDP and 50% from the change in the Consumer Price Index of the previous year and does not exceed the annual change in the Consumer Price Index.

However, the previous government (SYRIZA), with subsequent provisions, as a result of negotiations with the institutions, “froze” the increase initially until 2021 and then until the end of 2022.

The Vroutsi insurance law, which was passed in February 2020, did not change the relevant provision, although based on the decisions of the SC against the Katrougalos law, it brought an increase in the main pensions of those who have more than 30 years of insurance.

This means that the time for the implementation of the relevant provision is approaching in almost ten months from today, ie in December 2022, as the pensions are paid each month “against”, at the end of the previous one.

Thus, for the “old” retirees with more than 30 years of insurance, ie for those who retired before May 2016, their negative personal difference was reduced, between the recalculated (according to the Vroutsi law) and the paid pension.

The increase in pensions under the Katruggalo law will lead to a corresponding reduction in their negative personal difference.

Thus, as each year (if this is allowed by the course of GDP and inflation) there will be an increase in pensions, the personal difference will decrease faster and the real – and not the “accounting” – increase will come faster.

“Accounting” increase – through the reduction of the negative personal difference – will have other “old” retirees with less than 30 years of insurance.

Two other categories of retirees will have a real increase. The first belongs to the pensioners, who after the recalculation of their pension (either with the Katrougalos law or with the Vroutsis law), received increases in their paid pensions. The second belongs to the retirees who retired after May 13, 2016.