Small difference between number of employees and pensioners in FBiH: Working-age population leaving, less money for pensions

(Patria) - The number of employees by place of residence as of July 31, 2024, according to data from the Tax Administration, is 547,980, which is 1,139 fewer than the previous month. The difference between the number of employees and the number of pensioners is 97,811.

According to the structure of employees, the working-age population up to 35 years of age numbers 175,592, while those from 36 to 66 years of age number 372,388 workers.

It is well known that Bosnia and Herzegovina has problems with birth rates and has an aging population. According to these data, in the next five years, the number of pensioners will increase significantly, while employment is not following the same trajectory. If we add to this the fact that the working-age and reproductive population is leaving Bosnia and Herzegovina, the country will see all the consequences of demographic trends in the next few years.

The number of pensioners in the Federation of Bosnia and Herzegovina is 450,169, and 290 million BAM was needed to pay pensions for July. For example, the number of pensioners in November 2023 was 441,735. That number has increased by just under 9,000 in less than a year. If we compare this with the fact that the number of employees has also decreased by 1,139, and that the number of employees in two categories has decreased, it is clear that the number of pensioners will be higher starting this month. In June, there were 81,496 employees aged 56 to 64. The number of employees aged 66 was 3,868. According to data for July, there was a decline, so there were 80,727 employees aged 56 to 64, and 3,809 aged 66.

Data from the Tax Administration of FBiH on age structure

According to the latest data from the Federal Ministry of Finance, the difference between paid pensions and paid contributions in FBiH amounted to 281 million BAM, and was covered by funds from the Budget of the Federation of Bosnia and Herzegovina. Therefore, the number of employees cannot finance the needs for pension payments in FBiH.

In recent months, pensioners have activated demands for pension increases, as pensions cannot cover basic living costs, which are rising day by day.

The Government of FBiH is also facing a fiscal reform that would involve reducing the contribution rate. However, given these numbers and forecasts that more and more money from the budget will be needed for pension payments, it is clear what the Government of the Federation of Bosnia and Herzegovina fears and why it has slowed down the adoption of the set of fiscal laws.

Prime Minister Nermin Nikšić announced that reducing contributions would significantly impact budget revenues, and that they must ensure that social benefits and pensions are not jeopardized.