HUNGARY - Hungary must make further progress on reforming its pension system to reduce cost pressures on its national budget, the Organisation for Economic Co-operation and Development said.
The organisation, which represents 31 of the world's most developed and wealthiest nations, said Hungary "should increase the statutory retirement age in line with increases in life expectancy".
In its 2010 economic analysis of the Eastern European country, one of the worst affected by the global financial crisis, the OECD praised government moves to implement "long-overdue" structural reforms, including adopting a new pension system last May.
"This reform, which increases the retirement age, will also favour labour supply, thereby supporting potential growth," the OECD said in its report.
"Past and recent reforms of the pension system - in 1998, 2007 and May 2009 - should lead to a slower increase in pension costs," it added.
The country was the first to approach the International Monetary Fund for a bail-out loan in 2008 after its currency collapsed and is still mired in a deep recession.
Romania is also looking at structural reforms to reduce fiscal pressures.
Earlier this week, the Romanian government signed a law approving radical pension reform that will increase the retirement age for many civil servants and introduce a defined contribution system. (Global Pensions, February 11, 2009)
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