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The Government of the Republic of Serbia

In the service of citizens

Current state of public finances best in past decade

Belgrade, 30 April 2015

Prime Minister Aleksandar Vucic announced today that the government will start talks with the International Monetary Fund (IMF) in August on increasing salaries and pensions, and added that it is realistic that this increase be effective from October this year.

Vucic told a press conference in the Serbian government that the average salary remained the same as in April last year, but that the government will provide conditions for their increase in the public sector as well.

He reiterated that salaries and pensions will be increased, and announced that the budget deficit in 2015 will be 4% instead of 4.75%, as planned.

Our intention is to implement structural reforms in terms of tax administration and public enterprises. When it comes to capital investments, I took over the supervision and full responsibility, and the situation will be much better in May, said the Prime Minister.

He said that the biggest problem is the privatisation process, but also pointed out that nearly 75% of the fiscal demands of the IMF will be filled in the first year of the programme.

Before the end of the year, citizens will feel in their pockets significant improvement, said Vucic.

According to Vucic, the government has withstood all temptations, including strikes, but has been able to revive Serbia nonetheless.

The Prime Minister pointed out that the current state of public finances in Serbia is the best in the past decade.

He recalled that the IMF went with the estimate that GDP growth in our country will be minus one, then the assessment was corrected to minus 0.5 and zero, and now it is expected to be plus 0.5 in August.

I expect that we will have a plus 1 at the end of the year, said Vucic and pointed out that this is a great success because it is almost unrecorded with fiscal consolidation measures at the same time.

The Prime Minister pointed out that there is money in the budget and that Serbia will continue to spend more on infrastructure projects, that the Serbian economy will open more jobs and that more investments will come already in May.

Serbia's budget deficit on the last day of April is a maximum of RSD 21.5 billion, compared to the anticipated amount of RSD 71 billion.

Vucic reminded that Serbia has not had such a deficit in the last ten years, and that it was anticipated that the budget deficit in April be 17.5 billion, while today we have a surplus of RSD 3.5 billion.

The reality is that we are not in the red this April, said Vucic, adding that in the worst case, additional savings could amount to RSD 17.5 or 18 billion.

Only two or three EU countries have such a deficit, while other countries have a significantly higher deficit, he said.

Responding to the question whether the positive macroeconomic results in the first four months mean that the government will not release 5% of employees in the public sector, the Prime Minister said that 3% is a natural outflow of employees, while the remaining 2% will be negotiated on with the IMF.

Vucic confirmed that he will participate in the “Friends of Serbia” in Brussels on 18 May, which will be attended by foreign ministers of all member states of the European Union.

We will present Serbia there and will seek support for our country. We will thank for the support we have received so far from the EU and we will ask for the opening of chapters, said the Prime Minister.

Then I will travel to Berlin, where should I address the German parliamentarians and advocate for Serbia to get the opening of chapters as soon as possible, he concluded Vucic.