OECD proposes limiting pension costs to free up funds for defense

The Organisation for Economic Co-operation and Development (OECD) has advised Slovenia to curb pension expenses, possibly by adjusting indexation methods, to create fiscal space for increased defense spending and bolster public finances. The report highlights the necessity of a tax reform to improve the country's financial standing.

According to the OECD, Slovenia needs to lower its public finance deficit to enable a permanent increase in defense outlays. The organization suggests that limiting pension costs is a key measure. Furthermore, the OECD advocates for a tax reform that would reduce the tax burden on labor while increasing taxes on property and consumption.

The report also touches upon the economic forecasts for Slovenia and identifies areas of concern. It examines how the German fiscal package might impact Slovenian exports. The OECD's recommendations aim to guide Slovenia toward a more sustainable fiscal path, balancing immediate needs like defense with long-term financial health.