According to the 2019 draft budget, the state plans to spend 19 billion dinars more on wages in the public sector. The government has also drastically increased allocations for agriculture, employment and healthcare.
The draft budget for the next year clearly shows that the state is not planning new cuts and drastic measures of fiscal consolidation. On the contrary, according to the document which the Blic daily saw, the government fulfilled its promise and increased public sector wage allocations. A total of 228 billion dinars is set aside in the 2019 budget for civil servant salaries compared to 209 billion this year, in accordance with the announced salary increase of 7 to 12 per cent.
More state funds will be allocated for subsidies, totalling 101.1 billion dinars, compared to this year’s 89.3 billion. The largest part (41%) will be given to farmers, in the shape of grants, then to businesses (17%), rail (14.5%) and roads (9%). Agriculture will receive 6 billion dinars more than this year, which is a 21 per cent increase, while the allocation for businesses is higher by 2.5 billion dinars. Some state subsidies were planned for the construction and maintenance of roads, but also for the development of tourism. Culture, however, will receive the same budget allocation as last year – 4 billion dinars.
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The draft budget clearly shows that the state will increase investments in health care. The National Republic Health Insurance Fund will receive 34.7 billion dinars, which is an increase of about 30 million euro compared to the 2018 budget. The allocations for the National Employment Service have also been doubled.
On the other hand, the costs of interest on borrowed loans are declining. Instead of this year’s 117.8 billion dinars, next year, the interest costs will be reduced by 103.1 billion. Also, the state will pay 2.4 billion dinars less on the interest rate on domestic loans and 13 billion dinars less on the interest rates on foreign loans. Total loan payments will be reduced from 617 to 559 billion dinars.
Public enterprises and state agencies are expected to perform the same as last year. Directors of Srbijagas, EPS, Srbijasume and other public enterprises are still obligated to pay up to 50 per cent of their profit into the state budget, i.e. the public enterprises are expected to pay in 15.5 billion dinars into the state budget and state agencies are expected to pay 1.6 billion.
At the same time, no special allocations for higher pensions are foreseen by the 2019 budget. Judging by the figures, the state expects the Pension and Disability Insurance Fund to be supported more by new employment instead of state contributions. The 2019 budget will allocate 181.4 billion dinars to the Fund, for disbursement of pensions, compared to 185.8 billion from last year.