Increase in Retired Individuals' Buying Power Surges by 9.8% over the Last Ten Years
In a recent study, the PNC Bank of Portugal analysed the impact of pension updates based on the rules stated in law. The analysis, however, did not account for the exceptional measures introduced by the Portuguese government.
If the rules of update stated in the law were the only factors considered, pensioners would have faced a real loss in the value of their pensions of around 0.6%. However, the weekly Expresso reports that retirees saw their purchasing power increase, not decrease as predicted by the PNC Bank of Portugal's study.
The exceptional measures, such as targeted social benefits, minimum pension increases, and inflation adjustments, introduced by the government have a significant impact on the purchasing power of retirees in the lowest income brackets. As a result, the purchasing power of retirees under the general Social Security regime in Portugal increased by 9.8% over the last decade (2015-2024).
The PNC Bank of Portugal's study did not predict this specific increase in purchasing power for pensioners in the lowest income brackets. Furthermore, it did not consider the distribution of the impact of exceptional measures among different income brackets of retirees. The weekly Expresso reports that the PNC Bank of Portugal's study did not predict the specific distribution of the impact of exceptional measures on the purchasing power of retirees.
The data for this information comes from a study by the PNC Bank of Portugal. It is important to note that the study did not account for the impact of exceptional measures on all pensioners. The weekly Expresso reports that the increase in purchasing power does not apply to all pensioners.
The Portuguese government's exceptional measures are responsible for the difference between the observed 9.8% increase and the predicted 0.6% loss. These measures have not been fully accounted for in the PNC Bank of Portugal's analysis.
In conclusion, while the PNC Bank of Portugal's study provides valuable insights, it underestimates the impact of exceptional measures introduced by the government on pensioners' purchasing power. The Portuguese government's efforts to ensure pensioners in the lowest income brackets experience greater purchasing power growth have proven effective.
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