Romanian pensions lose 30% of value due to inflation, analyst warns

Many Romanian pensioners find their fixed pensions no longer cover essential expenses, as accumulated price hikes have drastically reduced their real purchasing power. A 3,000 lei pension, while unchanged on paper, now buys significantly less than before.

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As to understand how much a pension of 3,000 lei is worth today, we must first relate it to inflation. If we sum up the inflation of the last five years, it results that prices in Romania have increased cumulatively by approximately 50-55%. Practically, a pension that was worth 3,000 lei five years ago, if it had remained unchanged all this time, would have today the purchasing power of only about 1,950-2,000 lei from 2021. Or, viewed inversely: to buy today what you bought with 3,000 lei in 2021, you would need a pension of almost 4,600-4,700 lei.

Economic analyst Adrian Negrescu highlights the stark reality of inflation's impact. He calculates that cumulative inflation over the past five years has reached approximately 50-55%. This means a 3,000 lei pension from five years ago would need to be nearly 4,700 lei today to maintain the same standard of living. Even looking at a shorter, three-year period, inflation has diminished purchasing power by about a quarter.

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Even over a shorter horizon, of three years (2023-2025), the cumulative inflation exceeds 27-28%. In other words, a pension of 3,000 lei today buys what 2,340-2,350 lei bought three years ago - a real loss of approximately a quarter of the purchasing power, in just 36 months.

Negrescu points out that the last significant pension increase occurred in early 2024, involving a 13.8% indexation and a recalculation for about 3 million pensioners. However, due to budget deficits, pensions have not been indexed since, and further increases are uncertain. This stagnation in nominal pension amounts, coupled with rising prices, has created a significant gap between what pensioners receive and what they can afford.

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Practically, for almost three years, a pension of 3,000 lei has remained exactly the same nominal amount, while prices have continued to rise - including under the direct impulse of the government's own fiscal measures.