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Wednesday, March 29, 2023

Uruguay has the second highest minimum pension in the region, but what about its purchasing power?

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Uruguay has the second highest minimum pension in South America, estimated at $447, showed a report from the Focus Market consultancy. However, this good location compared to pensions in countries like Argentina, Paraguayan either Brazil it does not necessarily translate to greater purchasing power than in the rest of the region.

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The ranking of minimum retirements leads them Ecuador with $450 after more than 40 years of contributions. bolivian ranks third with a pension of 298 dollars and among the last places Paraguay (u$s 173), Argentina (u$s 156) and Venezuela (u$s 6), ninth, tenth and eleventh respectively.

“Uruguay managed to have levels of inflation below the rest of the Latin American countries and the peso, along with the Bolivian peso, is one of the few currencies that even appreciated against the dollar,” he explained to Ámbito.com Damian di Pacedirector of Focus Market.

According to the economic analyst, the Uruguayan minimum pension became one of the highest in the region after, in recent years, the country has registered inflation levels below those of USAwhich reached 9%, thus appreciating the national currency.

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Photo: Focus Market

However, the picture is different compared to the rest of the South American countries in terms of purchasing power it is about.

“You have to take into account the purchasing power parity that those dollars have and there what is real is that the goods and services in Uruguay, in dollar value, are higher than in Argentina or other countries in the region,” Di explained. Pace, author of “The Coming Future of Commerce.” “So effectively with those dollars in comparative terms, you can buy less than what you buy in other countries like Chili ($215 retirement) and Ecuador with the same nominal amount of retirement income”, he compared.

Di Pace also reflected on the sustainability of the retirement system in Uruguay, which is at the center of the political debate as a result of the social security reform project that the government sent to the Parliament. “The big drawback is what is called the Demographic bonusthat is, when the average life of passive people stretches and the birth rate and the number of workers who attend the system decrease, ”he said.

“To avoid the demographic bonus, the growth of the economy must be sustained, encourage formal employment and have a greater number of contributing assets within the economic system to sustain the evolution of liabilities to the pension system,” he explained.

Source: Ambito

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