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The Government of the Republic of Serbia

In the service of citizens

RSD 33.3 billion budget surplus in first five months of 2007

Belgrade, 30 May 2007

Serbian Minister of Finance Mirko Cvetkovic stated today that revenues cumulated since the beginning of the year until May 25 amount to RSD 234.7 million, which includes tax revenues of RSD 193.3 billion and non-tax revenues of RSD 41.4 billion.

Mirko Cvetkovic

In a first press conference since he was elected Minister of Finance, Cvetkovic said that the largest revenue of nearly RSD 100 billion came from VAT, RSD 36 billion from property tax whereas excises generated a total of RSD 32 billion for the Serbian budget.

The expenditures in the first five months amounted to RSD 201 billion, he said and noted that the budget generated a surplus of RSD 33.3 billion.

The Minister described the state of public finances as good and pointed out that macroeconomic production in the first four months of the year rose 5.3% compared with the same period of 2006.

He also said that the prices of goods and services in April rose 2.1% as compared with December 2006.

Cvetkovic highlighted the deficit in foreign trade of nearly $2 billion, with imports amounting to $3.8 billion and exports of $1.8 billion in the first three months of 2007.

According to him, exports grew 46.8% whereas imports grew 43.6%.

The country’s foreign currency reserves reached $12.9 billion with GDP per capita amounting to $4,207, Cvetkovic said noting that real GDP growth in 2006 stood at 5.7% whereas it reached 7% in the first quarter of 2007.

Speaking on the first results of the Ministry, he recalled that in the session of the newly elected government on May 25, the cabinet passed the Decree on interim financing of the Republic of Serbia for the period from January to June 2007, with interim revenues of RSD 286 billion and expenditures of RSD 260.6 billion, which leaves space for a surplus in the state coffers of over RSD 25 billion.

The Minister said that as part of the budget RSD 200 million will be set aside for National Housing Loan Corporation and noted that the funds should become operational as of today.

The Ministry of Finance completed negotiations with the World Bank concerning five loans, which are mostly investment loans and refer to the system of irrigation and drainage whose main user is the Ministry of Agriculture, Forestry and Water Management. Other loans deal with the regional development of the Bor district, energy efficiency in Serbia, reconstruction of traffic and reform of agriculture in transition.

Funds to be approved by the World Bank total $187 million. One part of the loan will be free of charge, while the other will be approved under the so-called IDA conditions and will be approximately $20 million, the Minister said.

Speaking about the bill on budgetary system, Cvetkovic said that this bill enables the extension of interim financing from three to six months. Also, it proposes that the preparation of the budget be moved from the Treasury to the Ministry of Finance, the Minister said and voiced hope that this document will be adopted in the course of this week or early next week.

He said that the Ministry is also preparing the budget for 2007 which should be completed before June 14, so that Serbia will revert to the regular system of financing as of July 1.