Mali: “The 2021 budget foresees higher living standard and public investments”

Finance Minister Siniša Mali has said that the two main pillars of the proposed budget for 2021 are a higher living standard of Serbian citizens and public investments, which will contribute to the GDP growth.

At the meeting of the Parliamentary Committee for Finances, Budget and Control of Public Funds, Siniša Mali said that total public investments in the coming year are expected to amount to 330 billion dinars or 5.5% of GDP.

According to the budget draft of the Serbian government, budget revenues in 2021 will be 1,336.3 billion dinars, expenditures 1,514.8 billion, so the deficit will be 178.5 billion, or 3% of GDP.

“The budget is planned based on the estimate that GDP growth will be 6%”, Mali adds.

Pensions will be increased by 5.9% in January and health care workers’ salaries by 5%, while in other public sectors, salaries will go up by 3.5% and 1.5% from April.

“The tax burden on wages will be reduced by 0.6%, while the minimum wage will be 6.6% higher”, said Mali.

He added that the salaries of army employees will be further increased by 10% from April.

Discover the most important foreign investments in Serbia in 2019: click here!

The President of the Fiscal Council, Pavle Petrović, has warned that, due to the uncertainty of next year caused by the pandemic, the government of Serbia should have planned a smaller budget deficit.

“It is possible that the expected GDP growth of 6% will not be achieved, so tax revenues will be lower, and therefore the budget deficit would be higher, which would mean that the state would have to borrow more and the public debt would exceed 60%”, Petrović adds.

“It would be better if the 150 million euro planned to be spent on higher civil servant wages went to the private sector, which contributes to the state budget,” said Petrović, adding that salaries in the public sector are currently 20% higher than those in the private sector.

He assessed that the planned assistance to Air Serbia is justified, but that it was necessary to restructure the company and determine its financial condition.

According to him, without state subsidies, Air Serbia has been consistently losing money (from 15 to 20 million euro per year) in previous years.

Governor of the National Bank of Serbia, Jorgovanka Tabaković, said that it will be difficult to achieve a 6% GDP growth, adding there is no doubt that there will be an economic recovery, stimulated by the growth of demand and investments.

(Danas, 07.12.2020)





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