The International Monetary Fund has urged German authorities to raise the effective retirement age above 67, saying an aging population could work longer and hence save less and spend more.
“A pension reform encouraging people to retire later in life would reduce the need to save for retirement, encouraging consumption and thus reducing the surplus,” said Enrica Detragiache, an IMF expert on Germany, as quoted by CNNMoney.
Some economists have criticized Germany for going in a different direction in 2014 by lowering the age at which Germans can retire to 63.
The German Council of Economic Experts warned at the time the change would cost the country an extra €10 billion ($11.4 billion) per year.
The regulator repeatedly called on Berlin to increase investment at home and reduce its large current account surplus, which comes from made-in-Germany exports to global markets.
According to the IMF, Germany’s large current account…
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