GDP Growth Puts Most Pensions to Rise Above Inflation in 2023 – Social Security

GDP Growth Puts Most Pensions to Rise Above Inflation in 2023 – Social Security

The vast majority of pensions in 2023 must rise above the rate of inflation recorded this year (which may be close to 5%), according to the rules set forth in the legal update mechanism, writes this Friday, April 8, Público.

In the case of pensions, an automatic update mechanism is applied which, if not changed, should lead to higher increases in inflation for all pensioners whose incomes are less than six times the value of the Index of Social Support (IAS), i.e. less than 2659.2 euros.

The legislation in place makes the increase in pensions dependent on the value of inflation (excluding housing) that will be recorded in November and on the average change in GDP over the past two years that the National Statistics Institute also recorded at that time.

Assuming that (and everything points to that trend), in the third quarter of this year, the average growth rate in the past two years was greater than 3%, the rules say that for pensions less than or equal to two IAS ( €886.4), the increase equals the inflation rate plus 20% of GDP growth.

For pensions over two and up to six IAS standards (€2659.2), the increase will be equal to inflation plus 12.5% ​​of GDP growth. Above this value, the modernization rules state that increase is equal to inflation.

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