Allianz study: Quarter of Romania's GDP to cover pensions, welfare, health in 2060

The Romanian government spending on pensions, welfare and health services will increase from 13.1 percent of its GDP in 2007 to 23.2 percent of GDP in 2060, according to the Allianz Demographic Pulse study, issued by Allianz-Tiriac Insurance. The reason behind this is that the share of the population over 60 years in Romania will reach 39.5 percent in 2050, from a current 20 percent. In the euro area, government spending on pensions, welfare and health services will reach nearly 30 percent of the GDP in 2060. In Romania, it is estimated that these costs will reach 23.2 percent of the GDP in 2060, compared with a rate of 13.1 percent of the GDP recorded in 2007. The biggest increase will be recorded in spending with pensions, which will go up by over 9 percentage points of the GDP within about 50 years- from 6.6 percent of the GDP in 2007 to approximately 15.8 percent of the GDP in 2060. “However, the challenges arising from population aging will differ radically in the European Union compared to the U.S. and Asia, depending on the existing social systems”, shows the study. Irina Popescu, irina.popescu@romania-insider.com