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The Government of the Republic of Serbia

In the service of citizens

Government satisfied with positive trends in economic reforms

Belgrade, 7 September 2006

Serbian Minister of Economy Predrag Bubalo said that Serbian government members expressed satisfaction in the session held today with the positive trends in economic reforms this year, which increased business activity as well as real GDP.

Predrag Bubalo

In a press conference held after the government session today, Bubalo said that since 2001 Serbia has recorded continuous GDP growth by more than 5% on average, while average GDP growth in the last three years alone was over 7.8%.

He added that GDP growth recorded in 2004 stood at 9.2%, in 2005 6.5%, while this year’s plan of 4.5% will be exceeded since the first quarter of the year saw a 6.3% GDP growth, which asserts that it cannot be lower than 7% by the year’s end.

The Minister of Economy explained that this was due to industrial production growth in real sector, primarily in three fields, i.e., production of energy, extraction of ore, minerals and stone as well as the processing industry.

According to Bubalo, the country’s foreign currency reserves increased from $8.5 billion to around $11 billion, especially after the transaction with Telenor.

Inflation is expected to remain at the projected level of below 10%, Bubalo said and added that exports also increased more than 20% since the beginning of the year, or 24% in the first half of the year.

In the past two months, Serbia recorded record high monthly exports in the past ten years, Bubalo said but noted that imports grew at a higher pace than exports.

Citizens’ savings reached €2.624 billion this year, or 17.2% more than last year whereas an average monthly salary in the January-July 2006 period increased 25% to 20,414 dinars, Bubalo said.

Structural reforms in real sector continue, he noted and added that 256 companies employing 20,146 employees were sold, which generated a revenue of €151.5 million and committed the buyers to invest €105 million in the purchased companies.

Speaking on the budget revision, Bubalo said that the revenues will stand at 521 billion dinars while expenditures will total 505 billion dinars, which will leave a budget surplus of 16 billion dinars. He also explained that out of 505 billion set aside for expenses, 445 billion dinars will be spent on budget users while 33 billion will be used for realisation of the National Investment Plan.

Slobodan Lalovic

Serbian Minister of Labour, Employment and Social Policy Slobodan Lalovic said that the government today adopted the draft of the national strategy on ageing for the period from 2006 to 2015.

He noted that this issue is particularly important as there are over 1.2 persons in Serbia aged over 65, which makes one-sixth of the whole Serbian population. Every second aged person above 65 lives in old aged homes, he said and added that the strategy should create optimum economic and social conditions so that the older people do not feel rejected in society.