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The Government of the Republic of Serbia

In the service of citizens

Budget for 2007 to secure macro economic stability

Belgrade, 18 June 2007

Serbian Minister of Finance Mirko Cvetkovic said today that the budget for 2007 secures macro economic stability and reflects Serbia's economic and social priorities aimed at improvement of business activity, employment, living standards and macro economic stability.

Mirko Cvetkovic

Expounding the 2007 budget bill which Serbian parliament's Finances Committee adopted in principle, Cvetkovic told parliament members that the budget's revenues in 2007 will be RSD 581.8 billion and expenditures RSD 595.5 billion, so the budgetary deficit will be RSD 13.7 billion.

The Minister explained that the proposed budget for this year is based on macro economic stability, envisaging a GDP growth of 5.9% and retail price growth of 6.5%.

Exports are also expected to grow more than last year and imports less than last year due to a decrease in local demand.

He said that the major challenge at the macro economic plan will be the reduction of the foreign trade deficit.

He said that the major expected budgetary revenues are expected from the collection of value added tax (VAT) in the amount of RSD 270.4 billion, citizens' income tax in the amount of RSD 61.4 billion, profit tax in the amount of RSD 27.3 billion and non-tax revenues in the amount of RSD 64.5 billion.

Transfers to organisations of mandatory social insurance will amount to RSD 147.4 billion, specified Cvetkovic and added that for this year, the funds for the National Investment Plan will be 4.8 times bigger than in 2006 and will stand at around RSD 44.4 billion.

The projected funds for public debt settlement (interest and capital sum) are over RSD 58.6 billion, said the Minister and added that the government will in 2007 continue settling its public debt.

Cvetkovic said that Serbia is not one of the highly indebted countries and that its public debt stood at €9.3 billion last year, which is 32% of GDP in 2007, whereas the direct debt stands at €8.5 billion, out of which sum €3.8 billion is the domestic debt.

Transfers to other levels of authorities, to the Autonomous Province of Vojvodina and the local self-government, will amount to around RSD 56 billion, said Cvetkovic. He recalled that there was a surplus of RSD 31.5 billion in the budget last year because revenues stood at RSD 499 billion and expenditures at RSD 467.6 billion.