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Memorandum on budget, economic, fiscal policies for 2008 adopted
Belgrade,
18 October 2007
The Serbian Ministry of Finance stated that the government at its session today adopted the memorandum on budget, economic and fiscal policies for 2008, with projections for 2009 and 2010.
According to the statement, the memorandum contains the framework for implementing economic and fiscal policies and structural reforms in the upcoming three year period which is also the first step towards adopting the 2008 budget.
The basic aims of the economic policy are maintaining macroeconomic stability and continuation of economic growth and employment, while statistical aims are GDP growth at an annual average rate of 6.3%, reduction of inflation to 4% in 2010, as well as reduction of the currently high deficit from 14.7% of GDP during this year to 11% of GDP in 2010.
In order to achieve these aims during the next year, the memorandum envisages a reduction of total public expenditure by 1.2 percentage points of GDP, in which the share of the Serbian budget in GDP is reduced by 1 percentage point.
The key measure for reducing public expenditure is maintaining the real level of the budget salary fund during 2008 at the level which will be reached by the end of this year, reducing budgetary subsidies by 5% and investments by 10% against 2007.
During the period from 2009 to 2010 public expenditure will be further reduced by nearly 0.8 percentage points of GDP.
The memorandum on budget and economic and fiscal policies also contain a programme of economic structural reforms, whose realisation will secure harmonisation of the Serbian economy with that of the EU.
The most important tasks of the government during the period from 2008 to 2010 are finishing privatisation of socially owned companies, state owned banks and insurance companies, continuation of restructuring and beginning the privatisation of public companies, improving the business climate and competition, as well as advancement in public financing and public administration.
The basic aims of the economic policy are maintaining macroeconomic stability and continuation of economic growth and employment, while statistical aims are GDP growth at an annual average rate of 6.3%, reduction of inflation to 4% in 2010, as well as reduction of the currently high deficit from 14.7% of GDP during this year to 11% of GDP in 2010.
In order to achieve these aims during the next year, the memorandum envisages a reduction of total public expenditure by 1.2 percentage points of GDP, in which the share of the Serbian budget in GDP is reduced by 1 percentage point.
The key measure for reducing public expenditure is maintaining the real level of the budget salary fund during 2008 at the level which will be reached by the end of this year, reducing budgetary subsidies by 5% and investments by 10% against 2007.
During the period from 2009 to 2010 public expenditure will be further reduced by nearly 0.8 percentage points of GDP.
The memorandum on budget and economic and fiscal policies also contain a programme of economic structural reforms, whose realisation will secure harmonisation of the Serbian economy with that of the EU.
The most important tasks of the government during the period from 2008 to 2010 are finishing privatisation of socially owned companies, state owned banks and insurance companies, continuation of restructuring and beginning the privatisation of public companies, improving the business climate and competition, as well as advancement in public financing and public administration.
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