March 22, 2017 / 4:06 PM / 3 years ago

Germany to increase state pension by up to 3.6 pct from July

BERLIN, March 22 (Reuters) - Germany’s 21 million pensioners will see their state benefit rise by up to 3.6 percent from July, Labour Minister Andrea Nahles said on Wednesday, in line with solid wage increases secured by German workers this year.

The increases to the state pension will not be as big as unusually large increases last year but could still help boost private consumption in Europe’s largest economy, which is increasingly relying on household spending to drive growth as exports have weakened.

The state pension in western Germany will rise by 1.9 percent on July 1, while in former East Germany it will increase by 3.6 percent as the government continues to narrow the gap between the two regions.

Nahles, a member of the Social Democrats (SPD) - the junior partner in Chancellor Angela Merkel’s ruling coalition - announced the rises six months before the country’s national election, which is expected to be tight.

Last year the state pension rose by 4.25 percent in western Germany and 5.95 percent in the former Communist East - the highest increase in more than 20 years, though it was partly caused by a one-off statistical effect.

There are around 16.9 million pensioners in western Germany and around 4.1 million pensioners in eastern Germany, according to pension insurance data.

Germany is aiming to standardise the pension level in the two parts of the country by 2024.

This year’s pension increase will push the pension level in the former East up to around 95.7 percent of the level in the former West. (Reporting by Holger Hansen; Writing by Michelle Martin; Editing by Susan Fenton)

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