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The Government of the Republic of Serbia

In the service of citizens

Dinkic meets with IMF representatives

Belgrade, 26 August 2009

Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic tonight confirmed that the government will not increase VAT in order to cover the budget deficit as it will manage to cover the planned budget deficit of 4.5% of GDP by reducing the number of people employed in public administration.

In an interview with B92, Dinkic said that the Serbian and IMF delegations reached agreement on the majority of issues. He added that this year's budget deficit is expected to be between RSD 5 billion and RSD 10 billion.

The Minister recalled that in the first seven months of 2009 the government managed to add RSD 56 billion to the budget without major difficulties.

He noted that a slight increase in budget income was recorded in July and August, which proves that the recovery of the Serbian economy has already begun.

The two sides also discussed the 2010 budget deficit, which is expected to be 4% of GDP.

Dinkic said that the number of people employed in state administration will be reduced and that salaries and pensions will not be reduced but frozen.

Minister Dinkic announced that at the next government session he will present draft laws on public servants and the number of public servants needed in local administration.

The Minister voiced his belief that the draft laws will be adopted by the end of October in order to complete the systematisation of the working posts in state administration by the end of this year.