Draft Budget Raises Pensions for 2012
The freshly written 2012 budget promises a 4.4 percent increase of pensions that will cost the state an extra 72 million euros.
"I know that there isn't a single person in the Cabinet who thinks that pensions should not grow by 4.4 percent next year," Prime Minister Andrus Ansip told Parliament yesterday.
Ansip said Estonia's previous decision to raise pensions by 5 percent during the economic recession contrasted greatly with the treatment of pensioners in other EU countries. "Thanks to that, the number of pensioners living in poverty or in risk of poverty decreased significantly,“ said Ansip.
Nevertheless, Estonian seniors still have one of the lowest pensions in the EU.
In 2011, pensions remained at last year's level - ranging from 128 to 305 euros depending on years worked.
The Estonian economy grew by 9.5 percent in the first quarter of this year and by 8.4 percent in the second quarter. A fresh analysis by the Ministry of Finance predicts the economy to grow by 7 percent this year and 3 percent next year. The ministry also drew up a risk-based forecast, presuming that the EU and the US cannot avoid another recession, that predicted 1 percent economic growth for next year.
The Bank of Estonia has warned the Finance Ministry that its main forecast is overly optimistic.
Ott Tammik