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The Government of the Republic of Serbia

In the service of citizens

Total 2007 budgetary funds 601.3 billion dinars

Belgrade, 30 November 2006

Serbian Minister of International Economic Relations and coordinator of the Ministry of Finance Milan Parivodic stated today that a total of RSD 601.3 billion in budgetary funds are envisaged for 2007.

Milan Parivodic at today's press conference

Speaking at a press conference held after the government session, Parivodic specified that the envisaged budgetary funds for the next year are RSD 551.6 billion, while RSD 49.7 billion are planned for the National Investment Plan.

He said that the budget bill and the projected economic policy for 2007 envisage the continuation of a high economic growth, high influx of foreign direct investment, maintenance of macro economic stability, creation of new jobs, GDP growth and a 7.5% inflation rate.

According to Parivodic, the budget for next year has been projected precisely with the aim of keeping the results achieved so far, which means a 7.5% growth in prices and 7% GDP growth is planned for 2007.

Speaking about the results achieved this year, Parivodic said that inflation currently stands at 5.6%, GDP is 6.7%, the industrial production growth is 5.5%, while exports have increased by 27.6% and imports by 22%.

The Minister said that the 2007 budget bill, which is harmonised with the new Constitution of Serbia, envisages that the budget of the Autonomous Province of Vojvodina accounts for 7% of the Serbian budget, and that three-sevenths of the provincial budget be used for financial capital expenditures.

The 2007 budget envisages changes in legal obligations of the republic budget towards local self-governments by doubling transfer funds for local self-governments, so instead of RSD 15.4 billion which have been set aside this year, in 2007 local self-governments will receive RSD 29.75 billion.

Parivodic added that in the 2007 budget, the National Investment Plan will be funded with privatisation proceeds realised in previous years.

He said that another novelty is that the budget for the upcoming year is partly a programme budget, which means that expenditure is connected to projects, and not to concrete expenses such as purchase of goods and services.

According to Parivodic, the so called “pilot ministries” whose projects have been included in the programme part of the budget for the upcoming year are ministries of religion, economy, trade, tourism and services, health, public administration and local self government.

The Minister pointed to the fact that the 2007 budget, compared to the 2006 budget, also envisages a growth in tax revenues by 10% and in non-tax revenues by 9%.

Parivodic also added that it is planned that in 2007 the salary coefficients for all those employed will rise by 7.5%, and it is envisaged that Serbia will be further relieved of obligations regarding payment of internal and external public debt.