Keepin touch

Whether you have a question, comment, suggestion or any problem in the purview of the government, send us your message and we will try to respond as soon as possible. If your problem is not in our purview, we will forward your message to the relevant institution.

The Government of the Republic of Serbia

In the service of citizens

No salary increase in public sector until recession ends

Belgrade, 18 January 2010

Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic today said that any increase in public sector salaries before the recession is over would devastate the country’s economy, underlining that there will be no increase in paycheques.

Mladjan Dinkic

Author: www.infobiro.rs

Dinkic, who attended the opening of the annual congress of the International Hotel and Restaurant Association, voiced his belief that the dinar exchange rate will remain stable this year, stressing that the foreign currency reserves of the National Bank of Serbia have amounted to a record €10.5 billion, noting that the dinar has already began to rise.

He noted that since last February the dinar exchange rate fell by only 4%, while the inflation rate stands at 6.6–7%. He also warned that the demands by the electric power industry of Serbia EPS and other public companies asking for higher salaries pose a much greater threat to inflation.

The Minister reiterated that if these demands are met, it will cause inflation to rocket, recalling that at the session on January 14 the government decided to hold a special meeting to discuss this issue.

Dinkic underlined that the government and the National Bank of Serbia are not guilty for the drop of the Serbian dinar because demand was higher than supply, which happens every December and January because businessmen buy foreign currencies in order to buy foreign goods and to repay debts from the previous year.

According to him, public spending last year was within the limits of the agreement achieved with the International Monetary Fund (IMF) and budget revision and there were no extra payments from the budget.

Also, Dinkic said that it should be found out why Serbia does not use loans of the World Bank for underdeveloped countries which are very favourable. The repayment period of 20 years, grace period is 10 years and the annual interest rate is below 1%.