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Aging society stores up future problems

March 2nd, 2023

An independent economist fears that unless the government introduces further tax cuts and other incentives, the aging of the Hungarian society will lead to a ‘pension catastrophe’.

On Portfolio, István Palkó predicts that the Hungarian pension system will face huge challenges due to unfavorable demographic changes. The independent analyst points out that the average age in Hungary is increasing all the time, in thirty years time every third Hungarian will be over 65. The current pension system will become unsustainable, he believes. In order to avoid its collapse, he suggests, the government should incentivize long-term savings and private pension schemes through tax cuts. He quotes Eurostat data showing that the saving rate of Hungarians is the fourth lowest in the EU, and is still declining.