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The Government of the Republic of Serbia

In the service of citizens

Government adopts Bill on 2008 Serbian budget

Belgrade, 12 November 2007

Serbian Minister of Finance Mirko Cvetkovic stated today that the government adopted the Bill on Serbia’s 2008 budget which envisages state revenues of RSD 639.6 billion, expenditure of RSD 654.4 billion and a deficit of RSD 14.8 billion.

Mirko Cvetkovic at today's press conference

Author: Fonet

Cvetkovic told a press conference following the government’s special session that the revenues and expenditure for 2008 will be nominally higher by 9.9% than this year’s and that the projected deficit will go up by around 8.5%.

According to Cvetkovic, the basic parameters of the Serbian government’s macroeconomic policy for 2008 will be inflation rate of 6%, GDP growth of 6% and reduction of the foreign trade deficit from 20.2% to 18.9% of GDP.

In 2008, the government will lead a restrictive policy regarding salaries, warned Cvetkovic and stressed that salaries in the public sector may increase by 6% at the most, that is, just as much as the inflation will go up.

The Minister also specified that the projected growth in salaries by the end of the next year will be 16% since this year’s growth will be copied in 2008.

Speaking about the 2008 budget, Cvetkovic explained that the greatest expenditure will be the portion set aside for the budget of local self-governments and the Autonomous Province of Vojvodina, as well as for the Pension and Disability Fund. The Minister added that salaries of army employees will undergo the smallest increase, and the largest one will be realised in the judiciary sector.

According to Cvetkovic, budgetary surplus of around RSD 39.2 billion has been achieved in the first nine months of 2007, of which over RSD 24 billion is income from the sale of the licence to the third mobile phone operator and around RSD 9 billion is the old settled pension debt.

The government’s essential aims in 2008 will be the preservation of macroeconomic stability, dynamic economic growth, increased employment rate and better standard of citizens, as well as acceleration of the stabilisation and association process with the EU, explained the Minister.

He stressed that around RSD 46.6 billion has been planned for the National Investment Plan for 2008, for which RSD 34.6 billion will be set aside from the budget and RSD 12 billion will be provided through loans.

Cvetkovic also said that loans from international financial institutions will be withdrawn, such as those from the World Bank and the European Bank for Reconstruction and Development, mostly for the purposes of building infrastructure in the country.

Since Serbia lost the embassy building in Brussels in the course of succession of former Yugoslav republics, it now plans to set aside funds for the construction of new premises, announced the Minister and added that loans of €12.5 million will be taken abroad and will be intended for Serbia’s diplomatic representative offices in the world.

Speaking about the public debt settlement, Cvetkovic stressed that around RSD 48.4 billion will be set aside from the 2008 budget, out of which domestic creditors will get RSD 39.2 billion, foreign creditors RSD 6.4 billion and RSD 2.8 billion will be paid out on account of activated guarantees.

The Minister also noted that privatisation revenues in 2008 will not be recorded on the revenue sheet in the budget and explained that even if there are no revenues from privatisation, the budget has been planned to sustain all projected expenditures.