Budget discussions due on Monday

The government is due to adopt the draft Law on the 2008 Budget at an emergency session on Monday.

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Friday, 09.11.2007.

16:47

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The government is due to adopt the draft Law on the 2008 Budget at an emergency session on Monday. Prior to the session, the Governmental Committee for Economic and Financial Affairs will convene to adopt the proposed budget for next year. Budget discussions due on Monday According to a Government Memorandum on the Budget and Economic and Fiscal Policy for 2008, spending is forecast at EUR 8bn with a deficit of around of EUR 182mn, with a fall in public spending and a freeze in public sector salaries. That means that the budget for 2008 will be around 10 percent higher than 2007, as this year’s state income is planned at around EUR 7.4bn, and spending at around EUR 7.6bn. The session was initially announced for today, but then postponed once again. The government had a legal obligation to send the draft to the parliament by November 1. Meantime, National Bank of Serbia (NBS) Governor Radovan Jelasic Friday voiced concern that the government was, with the budget draft currently in circulation, moving away from its own budget memorandum. Stability of prices will be difficult to maintain next year as the cabinet intends to revoke the planned reduction of public spending set out in the memorandum. The central bank will do everything to keep core inflation in 2008 within the planned 3 to 6 percent, he said, noting that general stability of prices will be difficult the maintain as the announced budget is different from that originally planned. Jelasic told a news conference that the government is planning inflation of up to 6 percent next year, as envisaged in the memorandum, but that the reduction of public spending will be lower than planned. This means that the government did not heed the recommendation of the International Monetary Fund that a budget surplus is better than deficit for macro-economic stability, the NBS chief concluded.

Budget discussions due on Monday

According to a Government Memorandum on the Budget and Economic and Fiscal Policy for 2008, spending is forecast at EUR 8bn with a deficit of around of EUR 182mn, with a fall in public spending and a freeze in public sector salaries.

That means that the budget for 2008 will be around 10 percent higher than 2007, as this year’s state income is planned at around EUR 7.4bn, and spending at around EUR 7.6bn.

The session was initially announced for today, but then postponed once again. The government had a legal obligation to send the draft to the parliament by November 1.

Meantime, National Bank of Serbia (NBS) Governor Radovan Jelašić Friday voiced concern that the government was, with the budget draft currently in circulation, moving away from its own budget memorandum.

Stability of prices will be difficult to maintain next year as the cabinet intends to revoke the planned reduction of public spending set out in the memorandum.

The central bank will do everything to keep core inflation in 2008 within the planned 3 to 6 percent, he said, noting that general stability of prices will be difficult the maintain as the announced budget is different from that originally planned.

Jelašić told a news conference that the government is planning inflation of up to 6 percent next year, as envisaged in the memorandum, but that the reduction of public spending will be lower than planned.

This means that the government did not heed the recommendation of the International Monetary Fund that a budget surplus is better than deficit for macro-economic stability, the NBS chief concluded.

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