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The Government of the Republic of Serbia

In the service of citizens

Serbian government’s economy policy yields results

Belgrade, 26 August 2004

Serbian Prime Minister Vojislav Kostunica said today that the main characteristic of economic trends in the first six months of 2004 was a significant increase in industrial production compared with a year ago.

Kostunica said that the increase in output was particularly strong in the processing industry, in which a 11.8 percent rise was recorded.

According to him, small and medium sized enterprises also saw an increase in production, particularly of capital goods (74%), while the energy sector posted a decline. Kostunica said that the budget deficit for the first seven months of 2004 was 19 billion dinars, but he added that this was by 17.6 percent down from a year earlier.

Speaking about positive results of the current economy policy, Kostunica said that the government has taken resolute steps to create a more investment-friendly environment in Serbia. The fact that the confidence of foreign investors has been regained is particularly encouraging, according to Kostunica.

He said that foreign direct investment jumped 2.5 times over a year earlier, with a net inflow of $318 million. In the same period, Serbia received medium and long term loans totaling $592 million, he added.

Unemployment fell by 2.2 percent against June 2003, boosting budgetary revenues, which amounted to 92.4 percent of the target, while spending was 89.5 percent of the projection.

The Prime Minister recalled that the government submitted to the parliament a draft of a new constitution several months ago and that very important laws have been passed to make doing business easier. He also announced a new company law.

Deputy Prime Minister Miroljub Labus said that the economy policy has had good results and added that gross domestic product should grow at least six percent this year. According to him, the agriculture recorded a 25-60 percent growth, while industrial production has been rising at an average rate of 7.5 percent. The number of jobless fell by 21,000, according to Labus.

He said that the projected inflation for August ranges between 0.5 and 0.6 percent and announced that the government will continue with its strict policy in tackling inflation. The government will also continue to cooperate with the National Bank of Serbia in reducing interest rates, Labus said, stressing that the government would not bow to pressure and would retain its firm economic and general policy.

Speaking of the bill on free access to information of public interest that the government approved today, Minister of Culture Dragan Kojadinovic said that it is aligned with the CoE and OSCE standards. The bill stipulates that the Serbian parliament will appoint agents for free access to information of public importance following the proposal of the line ministries.

Minister of Labour, Employment and Social Policy Slobodan Lalovic said that the government spent almost half a million dinars to implement the active employment policy and further half a million by the end of the year. He said that measures of active employment primarily include stimulation of self-employment, adding that 5,000 unemployed persons were recently granted means for those activities.

Minister of Mining and Energy Radomir Naumov told a press conference today that the government approved EPS’ decision to alter the calculation of electricity bills by extending the “green zone” from 300 to 350 kWh, which will reduce the electricity bills by approximately 70 dinars for three million households in Serbia.