Public Debt Approaching 70% of GDP: Risk to Pension Indexation, Warns the Fiscal Council

The Fiscal Council has highlighted, in its most recent analyses, that periodic pension increases could be frozen in the coming years, against the backdrop of rapidly rising public debt. This risk arises following the country's debt exceeding the 60% of Gross Domestic Product (GDP) threshold, a level considered critical from a budgetary standpoint.

How public debt is projected to evolve

According to data from the Ministry of Finance, as analysed by the Fiscal Council, Romania's debt level is following an upward trend:

• Current level: 60.01% of GDP
• Estimate for 2027: 63.3% of GDP
• Estimate for 2028: 63.9% of GDP
• Estimate for 2030: approximately 70% of GDP

This increase is reducing the fiscal space available for social spending, casting doubt over any pension rises scheduled for the period ahead.

Demographic pressure: the "decreței" generation and retirement age

Beyond the immediate financial risks, the Fiscal Council also flags a structural factor: an ageing population. The retirement of the generation known as the "decreței" will lead to a significant rise in budgetary expenditure allocated to the social insurance system. The institution warns that, by 2030, total pension costs will continue to grow, and authorities may consider raising the retirement age in order to maintain the financial balance of the system and address the structural deficit.