Q:
A:
Inflation must be harnessed next year
Belgrade,
10 November 2005
Serbian Deputy Prime Minister Miroljub Labus said today that the government has two major challenges for the next year - to reduce the deficit of the balance of payment and the relatively high inflation, and added that there is no fear that Serbia will be placed in some sort of debt bondage when it comes to the repayment of its foreign debt.
Author:
Tanjug
Speaking at a press conference held at the Hyatt Hotel on the occasion of presentation of the 300 most successful companies in Serbia in the "Top 300" edition of the Ekonomist Media Group, Labus said that next year inflation has to be placed under control through simultaneous measures of fiscal and monetary policies and reiterated that the government's projection is that this year's inflation will be 16.9 percent, and next year's 9.3 percent.
The Deputy Prime Minister said that the main task of the government's economic policy in 2005 was to reduce the deficit of the balance of payment. Last year it stood at 14.9 percent of GDP, this year it will reach 10.6 percent, and in 2006 it is planned to be 11.3 percent.
He explained that a slight rise of the deficit is expected due to larger import of capital goods and energy products.
According to Labus, the share of Serbia's foreign debt in GDP has been constantly reduced from 61.1 percent in 2004, to 59.6 percent this year, and in 2006 it is expected to be 57.6 percent. Labus added that Serbia's foreign debt currently stands at $14 billion, of which $9 billion is state debt and $5 billion the debt of private entrepreneurs and companies.
Serbian Deputy Prime Minister said that the state foreign currency reserves should, according to expectations of the government, at the end of 2006 total $7 billion, while at the moment they stand at a sum of $6.1 billion.
Labus recalled that the growth in GDP was 8.6 percent in the previous year, adding that this year growth will reach approximately 4.5 percent. He expressed his conviction that next year it will be about 5 percent.
Commenting on the business climate in Serbia, he said that Serbia is still not the best investment target, but the business climate is getting better day by day, and it is the mission of every future government to work on improving conditions for business and investment.
He said that it is important that the agreement with the IMF has been concluded, above all because of the business climate, adding that it will enable Serbia to improve its credit rating from the category “2B-” to “2 B+”.
The Deputy Prime Minister said that the main task of the government's economic policy in 2005 was to reduce the deficit of the balance of payment. Last year it stood at 14.9 percent of GDP, this year it will reach 10.6 percent, and in 2006 it is planned to be 11.3 percent.
He explained that a slight rise of the deficit is expected due to larger import of capital goods and energy products.
According to Labus, the share of Serbia's foreign debt in GDP has been constantly reduced from 61.1 percent in 2004, to 59.6 percent this year, and in 2006 it is expected to be 57.6 percent. Labus added that Serbia's foreign debt currently stands at $14 billion, of which $9 billion is state debt and $5 billion the debt of private entrepreneurs and companies.
Serbian Deputy Prime Minister said that the state foreign currency reserves should, according to expectations of the government, at the end of 2006 total $7 billion, while at the moment they stand at a sum of $6.1 billion.
Labus recalled that the growth in GDP was 8.6 percent in the previous year, adding that this year growth will reach approximately 4.5 percent. He expressed his conviction that next year it will be about 5 percent.
Commenting on the business climate in Serbia, he said that Serbia is still not the best investment target, but the business climate is getting better day by day, and it is the mission of every future government to work on improving conditions for business and investment.
He said that it is important that the agreement with the IMF has been concluded, above all because of the business climate, adding that it will enable Serbia to improve its credit rating from the category “2B-” to “2 B+”.
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