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The Government of the Republic of Serbia

In the service of citizens

Socially responsible proposal of 2011 budget revision

Belgrade, 11 October 2011

Prime Minister Mirko Cvetkovic today stated that the Bill on the 2011 budget rebalance is socially responsible because it secures regular social contributions and will continue to stimulate economic growth.

Author: rts.rs

Elaborating on the Bill on the 2011 budget revision at the Serbian Parliament, Cvetkovic explained that the proposed Bill envisages a cut in public spending from 45.5% to 43.8% of GDP.

The government proposed a budget revision in line with fiscal rules and in agreement with the IMF, which approved a new precautionary arrangement with Serbia on 26 September, the Prime Minister recalled.

He said that budget revenues have remained practically the same and stand at around RSD 707 billion, while expenses were projected at around RSD 850 billion, and the projected deficit is RSD 143 billion.

The Prime Minister noted that the expenses have the most funds, namely 39.4% envisaged for social payouts, while 3.7% will be set aside for administration.

The revision will enable regular payouts of salaries and pensions, he added.

It was initiated because of assessments that the economic growth by the year’s and will be somewhat lower than projected and will stand at 2%, bearing in mind the increasing global crisis and anticipated lower revenues.

The revision envisages funds for the encouragement of the economy and agriculture, which means that capital expenses will be increased.

The policy of drawing foreign investment has been yielding results for two years now and Serbia is a regional leader in this aspect, the Prime Minister observed.

He noted that the government will set aside €250 million as incentives to SMEs, announcing that a development bank will be established by the years end.

The Government will use all available resources to eradicate black labour market, the Prime Minister stressed.

Cvetkovic announced that amendments to the Law on property tax will bring taxes in 2012 to this year’s level, i.e. taxes will not be increased.

Speaking of amendments to the Law on public debt, the Prime Minister said that they will enable long-term crediting of local self-governments in order to finance infrastructure projects with the obligation to regularly report debt status to the Ministry of Finance.