LB: As people massively withdraw from pension savings, GDP and inflation would jump

If the Seimas adopts the Government's proposed reform of the second-tier pension accumulation system and residents begin to massively withdraw part of their accumulated funds from the funds and allocate them primarily for consumption, the country's economy would experience significant short-term fluctuations - in the first year, real gross domestic product (GDP), inflation, and imports of goods would increase rapidly.

The Bank of Lithuania (LB) and other public authorities spare no comments on the projects prepared by the Ministry of Social Security and Labour (SADM) on the second stage restructuring of pension accumulation. Among other things, it is stressed that the second-tier reform proposed by SADM could lead to the withdrawal of most individuals from pension accumulation, and that “the proposed amendments do not address the challenges of sufficient pens…