Azerbaijan increases pensions by 16.6 pct

By Azernews

By Rasana Gasimova

Azerbaijan ranks first among the CIS countries for the purchasing power of pensions as it increased pensions by two times in 2019. The country also plans to spend record $1.7 billion for social protection of its citizens in 2020.

As of January 1, the insured part of labor pensions will grow by 16.6 percent as a result of indexation in accordance with the annual growth rate of average monthly nominal wages in 2019, the Ministry of Labor and Social Protection of the Population has reported.

The indexation will cover 93 percent of pensioners, which is about 1.12 million people.

The Labor Ministry reported that additional funds to finance the growth of pensions will amount to 47 million manats ($27.6 million) monthly, which makes up more than 560 million manats ($329.4 million) per year. These funds will be allocated from the income of the State Social Protection Fund.

“As a result, the average monthly pension will increase from 262 to 300 manats. In addition, the amount of pension capital recorded in the insured part of personal account is also increased by 2.6 percent from January 1,” the report said.

The pensions are being increased in accordance with the order “On indexation of labor pensions” signed by the president on February 6, 2020.

Minister of Labor and Social Protection of the Population Sahil Babayev noted that as a result of the implementation of the revolutionary package of social reforms in Azerbaijan, the size of the minimum salary, as well as allowances and scholarships, nearly doubled and the minimum pension amount increased by 72.4 percent.

Babayev said that in general, the average volume of pensions in Azerbaijan over the past 16 years has increased eight times, salaries have increased 11 times; in addition, allowances and scholarships have repeatedly increased.

As part of the reforms carried out in the pension sector in Azerbaijan, the minimum pension level was increased two times in 2019.

First, the minimum amount of pensions increased to 160 manats, and then, according to the presidential decree dated October 1, 2019, it increased to 200 manats. Thus, this year this figure increased by 72 percent. In general, the growth of pensions covered 660,000 pensioners in the country.

Note that expenses for social benefits and pensions in Azerbaijan’s state budget for 2020 are projected at 3.244 billion manat ($1.912 billion), which is by 770.5 million manat ($454.169 million) or by 31.1 percent more than in 2019.