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The Government of the Republic of Serbia

In the service of citizens

Eight billion dinars in the state budget carried over to 2005

Belgrade, 5 January 2005

Serbian Minister of Finance Mladjan Dinkic said that in December 2004, the Serbian state budget recorded a 1.05 billion dinar surplus, and during the whole year the deficit stood at 22.3 billion dinars, which is 22 billion dinars less than the planned deficit.

Mladjan Dinkic

Dinkic told a press conference that on December 31, the Ministry of Finance met all obligations towards its beneficiaries through the treasury, resulting in a surplus of around 8 billion dinars. That is approximately 40 percent of the funds necessary to cover the entire budgetary deficit planned for 2005.

The Minister said that budgetary revenues in December were at their highest and stood at 35.7 billion dinars, while expenditures were 34.6 billion dinars. He added that revenues in 2004 were 333.6 billion dinars, and expenditures 355.9 billion dinars.

According to Dinkic, the 22.3 billion dinar deficit made up 1.7 percent of GDP in 2004, while in 2003, the deficit accounted for 4 percent of GDP.

He added that the National Bank of Serbia will also enter 2005 with much larger currency reserves than in 2003. In 2004, they were increased by $700 million, and currently stand at $4.25 billion.

The Minister said that the 2004 deficit was financed through privatisation revenues obtained in 2004 (3.1 billion dinars), loans from international financial organisations (5.2 billion dinars), privatisation revenues from 2003 (9.8 billion dinars) and debt accumulation at the capital market through the emission of securities (4.2 billion dinars).

Speaking about revenues, the Minister pointed out that Serbia has a surplus in its budget at the end of the year, while in most other countries deficit is rising in this period. He said that in all months of 2004 revenues were higher than in 2003, especially in the last quarter of 2004 when industrial production increased markedly. He voiced hope that GDP growth will be as much as 8.5 percent.

The aggregate public revenues were 23 percent higher than in 2003 and totalled 610 billion dinars, Dinkic said and specified that revenues from property taxes increased 26 percent, from the sales tax 22 percent and from the excise tax 34 percent.

Dinkic said that first funds from the collection of the value added tax (VAT) were paid into the budget yesterday. They totalled 4.3 million dinars and were collected through taxation of imports at customs. He said that more significant payments from the VAT collection are expected on February 10, when the first group of taxpayers, those whose annual income exceeds 20 million, are required to file tax returns. Taxpayers whose annual income is lesser than 20 million dinars should file tax returns on April 10.

After the reduction of petrol prices on January 1, owing to the introduction of VAT, there will be one more reduction of prices of oil derivatives this month, Dinkic concluded.