The International Monetary Fund has submitted a position to the Bulgarian government urging it to reduce the deficit in its pension system.

The position was drafted by a technical mission of the IMF to Bulgaria (October 13-25), led by Emanuele Baldacci.

The report of the IMF mission focuses on the options that Bulgaria has to reduce its expenditures and retirement system deficit in the medium run.

In a summary of the report, Baldacci has underscored that Bulgaria should take additional measures to reduce the state spending and increase revenues in the medium run in order to preserve its fiscal stability.

The IMF recommends that the Cabinet cut the pension system deficit, and warns that it could exceed 7% of the GDP, unless the system is reformed promptly.

The report says that the measure mulled by the government will only soften but will not eliminate the spending burden on the state budget generated by the retirement system.

The Funds recommends several measures including increasing by two percentage points the retirement payments to reach 18% as of January 2011; increasing by six months the requirement for years served by both men and women as of January 2011; increased control on the granting of disability pensions through random checks of the health of their recipients.

The IMF experts also recommend that deeper reforms because of the demographic crisis in the country that should ensure the fiscal soundness of the retirement system.

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