The Russian government will have to nearly double pension spending by 2050 if it does not raise the retirement age, which could be a very effective measure to balance the budget, Standard & Poor's Ratings Services analyst Marko Mrshnik said on Friday.
"Such a measure will of course have a significant impact. This is one of the measures aimed at regulating the problem in many countries," Mrshnik said at a presentation of the Global Aging 2010: An Irreversible Truth report.
The retirement age in Russia is much lower than in other European countries - men are entitled to retire at 60 and women at 55.
Finance Minister Alexei Kudrin has said that raising the retirement age would help bring down the increasing budget deficit of Russia's Pension Fund, currently at 1.3 trillion rubles. Prime Minister Vladimir Putin said in August that the government was "not even going to consider" the issue.
According to the agency's forecast, budget spending associated with irreversible demographic changes over the next 40 years may rise to 25.5 percent of Gross Domestic Product from the current 13 percent. Pension payments only will increase to 18.8 percent of GDP from the current 9.4 percent. Economic growth will slow down to 1.5 percent in 2050 from 4.5 percent in 2010, S&P said.
NEW YORK, October 8 (RIA Novosti)
