This year Croatia will spend a record high HRK 40.1 billion for pensions, according to Finance Ministry and Croatian Pension Insurance Institute (HZMO) data, Jutarnji List daily says in Tuesday's issue.

The amount is HRK 1.2 billion higher than last year, the paper adds.

When one compares the total pension outlays with the number of insurees, i.e. employees who paid pension insurance in the first six months of this year, it turns out that each employee will pay HRK 26,022 this year to keep the pension system stable.

Although the number of employees, according to HZMO data, is higher than in recent years, contributions per insuree are rising considerably, by some HRK 500 from last year. Although the pension system is not financed through employee contributions alone, such data show how the system’s costs are rising, Jutarnji List days.

Although outlays for pensions are rising by the year, their GDP share has been decreasing in recent years owing to faster economic growth. According to HZMO data, the highest pension expenditure-to-GDP ratio was recorded in 2015, when it stood at 11.4%, as against 10.3% in 2018.

Nonetheless, both domestic and foreign analysts have been warning that Croatia’s pension system is nearing the breaking point. The payment of pensions is not in question nor is it expected to be in the near future, but the ageing population and mass emigration will make the payments harder, Jutarnji List says.

(EUR 1 = HRK 7.38)