The first ministers cabinet meeting in Spain on Tuesday approved the rise in pensions by 0.9%. The increase will be applied retroactively from January 1 and will affect and will affect more than 10 million Spaniards, both contributory and non-contributory and passive class pensions.

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The 0.9% rise coincides with the average CPI estimate. If prices rise above that figure, the Government will compensate pensioners for the difference in a single payment before April 2021.

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This is the second consecutive year in which pensions in Spain increase above the expected legal minimum (0.25%). Last year they increased by 1.6% in general and 3% in the case of minimum and non-contributory.

The cost of this revaluation amounts to 1.406 bn euros. Prime Minister Pedro Sánchez assured after the announcement of the measure that he intends to negotiate a new deficit path with Brussels.

At this time, the deficit commitment agreed in the last legislature ontemplates a deficit of 1.1% for this year. Mr Sanchez now wants to renegotiate this figure with Brussels, as well as the horizon for the coming years. For 2019, the objective was to close with a deficit of 2%, data that the Government has not yet contributed, although almost all national and international organizations assume that this figure will be higher.

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