Q:
A:
Government adopts new austerity measures
Belgrade,
29 March 2012
State Secretary of Finance Dusan Nikezic announced today that the government has adopted a new programme of austerity measures which envisages savings of RSD 15.7 billion in this year's budget.
Dusan Nikezic
Nikezic told a news conference after the government’s session that the measures of saving do not apply to pensions, salaries, subsidies from the budget and social benefits.
The State Secretary explained that the goal of this programme is to reduce the budget deficit and reduce to the level envisaged by the 2012 Budget Law.
The planned savings of RSD 10.9 billion would come after part of own revenues is re-directed to general revenues in the buget, while savings on discretionary spending (travel, purchase of equipment, contractual services, grants to non-governmental sector) should provide a further RSD 4.8 billion, he explained.
Nikezic said that the government introduced borrowing limits with local lenders.
He said that the new austerity measures are due to a drop in budget revenues by over 20% in February, and noted that the government did spend beyond its plan.
Nikezic stressed that the government spent less than planned by the budget, by approximately 13%, but revenues in February fell by more than 20%, which resulted in the deficit.
The fall in economic activity was also due to bad weather conditions and the situation in the eurozone, he noted.
He also noted that incentives for economic growth will not be influenced by those measures.
Nikezic announced that at the initiative of Serbian President Boris Tadic the government at its meeting today adopted an amendment to the Law on VAT, abolishing VAT on products for babies.
The State Secretary explained that the goal of this programme is to reduce the budget deficit and reduce to the level envisaged by the 2012 Budget Law.
The planned savings of RSD 10.9 billion would come after part of own revenues is re-directed to general revenues in the buget, while savings on discretionary spending (travel, purchase of equipment, contractual services, grants to non-governmental sector) should provide a further RSD 4.8 billion, he explained.
Nikezic said that the government introduced borrowing limits with local lenders.
He said that the new austerity measures are due to a drop in budget revenues by over 20% in February, and noted that the government did spend beyond its plan.
Nikezic stressed that the government spent less than planned by the budget, by approximately 13%, but revenues in February fell by more than 20%, which resulted in the deficit.
The fall in economic activity was also due to bad weather conditions and the situation in the eurozone, he noted.
He also noted that incentives for economic growth will not be influenced by those measures.
Nikezic announced that at the initiative of Serbian President Boris Tadic the government at its meeting today adopted an amendment to the Law on VAT, abolishing VAT on products for babies.
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