Spending on pensions for the elderly will increase 27.4%

The expense destined to the payment of the Pension for the Welfare of Older Adults (PBAM) will increase 27.4% in 2023. This means that the social assistance program will have a cost of 303,700 million pesos, according to the Precriteria 2023 that the Ministry of Finance presented to Congress last Friday.

For the following years, the cost of the PBAM program will be difficult to cover, so it is estimated that by 2024 a budget equivalent to 1.9% of the Gross Domestic Product (GDP) will be required and 12 million adults over 65 years of age can be served. or more in the country, estimated the Center for Economic and Budgetary Research (CIEP).

“The estimate can change because the promise of the Executive with the amount of pensions is linked to inflation. If inflation is high like it is now, it will change,” said Alejandra Macías Sánchez, director of the CIEP.

In March 2021, the President announced that the PBAM will increase 20% over the next few years until it reaches 6,000 pesos bimonthly pension in 2024; it was also announced that the age to receive the program was lowered to 65 years from 68 years.

With the lowering of the age, it is estimated that more than 10.7 million older adults will benefit from the federal welfare program.

The CIEP forecasts that the total cost of contributory and non-contributory pensions of the different pension systems will represent 6.5% of the product in 2024.

“The pension issue is no longer a time bomb, it is here. Decisions have to be made in this regard and be more aware of spending increases that do not have a stable source of financing,” said Macías.

santiago.renteria@eleconomista.mx