Almost every fourth person in Serbia, or 24.6 per cent of the population, is at risk of poverty, while those under the age of 18 fall in the most vulnerable category, indicate the data published in the latest issue of monthly Macroeconomic Analyses and Trends (MAT).
The lowest risk category are persons older than 65, who have a risk rate of 19.5 per cent, while young people under the age of 18, with a risk rate of 30 per cent, are the most vulnerable.
One of the MAT contributors, economist Miladin Kovacevic, says that the at-risk-of-poverty rate in Serbia, representing only the monetary dimension of poverty, is the highest compared to other European countries, based on the statistics on income and living conditions published on the Eurostat website.
Looking at the economic activity, people in work fall into the lower risk category along with the pensioners, with a risk rate of 14.5 per cent.
Two-person households with at least one member older than 65 are at a lower risk of poverty compared to two-person households with both members below this age.
According to the statistics on household consumption, 32.6 per cent of the total household income comes from pensions, while 43.8 per cent is labor income.
The same statistics shows that out of the available household income, totaling RSD 56,073 in 2013, pensions accounted for RSD 18,264 on average.
Kovacevic said that the previous fiscal system created a rise in social inequality and poverty.
Asked whether pensions should also be cut as part of the forthcoming fiscal reform, Kovacevic said that judging by their impact on poverty and share in the total available household resources, pensions were at least as important, if not more so, as salaries in the public sector in hampering deeper social inequality.
“Pensions are the most important social buffer and a redistribution channel slowing down the otherwise dramatic expansion in inequality,” he said.
Nominal pension cuts would be a repressive measure so it seems that the new government’s decision to avoid such policy is justifiable, at least for as long as it can be compensated with other measures.
According to Kovacevic, the reform of the Pension and Disability Insurance Fund and wholesale reforms of the pension system are the key conditions for permanent consolidation of public finances.
Source SerbGov
