Ana Dolidze: “The pension is much lower as compared to when the Georgian Dream came to power.”
Verdict: FactCheck concludes that Ana Dolidze’s statement is FALSE.
Resume:
As compared to 2012, nominal pensions increased by 118% for those pensioners who receive the minimum pension. Ana Dolidze’s comment about the lowering of pensions is vague. However, politicians often convert various economic figures into USD which is a wrong approach. When discussing pensions or other incomes, the consumer price growth; that is, the inflation rate needs to be taken into account. Therefore, the real pension adjusted to the price level is to be analysed.
In 2021, the minimum pension in 2012 prices is GEL 168. In other words, as of April 2021 one can buy as much products with GEL 240 as with GEL 168 in 2012. The real growth of the minimum pension (adjusted to inflation) in 2021 is 52% as compared to the minimum pension in 2012 (GEL 110).
Naturally, FactCheck agrees that the old age pension in Georgia is unfortunately negligible and does not enable pensioners to independently have a decent quality life with their pension alone. However, the claim that the pension has been lowered since 2012 is definitely false.
Analysis
The leader of the For the People political party, Ana Dolidze, made the following statement in regard to pensions: “Pensions are much lower as compared to when the Georgian Dream came to power.”
When the Georgian Dream came to power in 2012, the government pension was GEL 110-125 (GEL 110 for pensioners under the age of 67 years and GEL 125 for pensioners over the age of 67 years). Since 1 January 2021, the old age pension is GEL 240-275 (GEL 240 for pensioners under the age of 70 years and GEL 275 for pensioners over the age of 70 years). Therefore, the pension growth in nominal figures is nearly 118-150%. For pensioners in certain categories, the pension growth was even higher. It was one of the Georgian Dream’s campaign pledges in 2012 to increase pensions to GEL 220-230 and it took eight years for the Georgian Dream to deliver on that promise. Given the growth of the consumer price level, however, it turns out that the pledge still remains unfulfilled.
The figures used by Ana Dolidze in order to make the claim about the lowering of pensions are vague. However, politicians often convert various economic figures into USD which is a wrong approach. Both the incomes and the expenses of pensioners are denominated in GEL and the effects entailing the currency’s depreciation are reflected in national currency denominated prices; that is, inflation. Therefore, the real pension dynamics need to be analysed. Over time, currency purchasing power decreases owing to inflation and hypothetically less goods and services can be bought for GEL 1. Therefore, we have to take a look at the real pension. In 2021, the minimum pension in 2012 prices is GEL 168. In other words, as of April 2021 one can buy as much products with GEL 240 as with GEL 168 in 2012. The real growth of the minimum pension (adjusted to inflation) in 2021 is 52% as compared to the minimum pension in 2012 (GEL 110).
Graph 1: Nominal and Real Pension Dynamics in 2012-2021, GEL
Source: National Statistics Office of Georgia, FactCheck’s Archive
To have the pension value lowered, the price level had to be increased by at least 118% in 2013-2021 in proportion with the growth of the old age pensions. However, in the aforementioned period, the general inflation rate increased by 42%. The inflation rate increased by 57% in foods and non-alcoholic beverages, by 33% in accommodation and utilities, by 63% in healthcare and by 22% in transport.
