The coronavirus pandemic has brought economies around the world to their knees. While world politicians are doing everything to avoid the abyss, in Serbia, the government has been reassuring citizens that the country will emerge from the health crisis as an economic winner and that unlike most countries in Europe and the region, there will be money for capital investments and higher civil servant salaries and pensions even during the pandemic.
According to the Finance Minister Siniša Mali, despite the current situation, the 2021 budget, will spur development as big investments in motorways, bridges and railways are planned. The projected budget revenues amount to 1,336.3 billion dinars and planned expenses to 1,514.8 billion dinars. The deficit will be about 3% of gross domestic product. The government of Serbia has forecast that the public debt in 2021 will be reduced to about 58.7% of GDP.
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“Despite the pandemic, we will increase the living standard (of our citizens) and we will invest in infrastructure,” said Minister Mali.
274 billion dinars are allocated to capital projects, 35% more than the 2020 budget. Every dinar saved, he assures, will go towards investments or boosting the living standard for citizens. The budget provides for an increase in pensions according to the so-called Swiss formula, in the amount of 5.9%, followed by an increase in salaries for health workers by 5% and the other civil servants by 3.5%. The non-taxable part of the salary will be increased from 16,300 to 18,300 dinars. The government also says that minimum wage will also go up next year.
Economic analyst Bogdan Petrovic estimates that the budget was prepared before the pandemic.
“We will certainly have economic consequences that will be felt not only in October and November, but also next year, in January and February. It seems to me that the promised increases in civil servant salaries and pensions are premature and should be done carefully,” warns Petrovic.
This post is also available in: Italiano