Public sector wages remain frozen

The Serbian government and the International Monetary Fund have agreed that pensions and public sector salaries will remain frozen until the end of the year. The salaries and pensions will adjusted three times over the course of the next year - in January, April and October, said Finance Minister Diana Dragutinovic. Public sector wages remain frozen “In January 2011, salaries and pensions will be adjusted to the six month inflation, or just under three percent. In April they will be adjusted to the three month inflation and half of the GDP growth, and in October to the six month inflation,” Dragutinovic specified in an interview for the Wednesday issue of Econom:east magazine. The finance minister assessed that “this is a relatively reasonable and acceptable solution”, somewhere between the government proposal, advocated by Economy Minister Mladjan Dinkic, that salaries and pensions be unfrozen as early as this October and the original agreement with the IMF that that stay frozen until April 2011. Dragutinovic also said the fiscal responsibility bill has been fully harmonized with the IMF and that it will go before the parliament by September 20 at the latest, because this is a requirement for a successful fifth review under Serbia's stand-by credit arrangement. The fiscal responsibility law will ensure that the fiscal deficit stays under four percent in 2011, the finance minister stressed. A delegation of the Serbian government and the International Monetary Fund (IMF) mission reached an agreement on the fifth revision of the stand-by arrangement, including unfreezing of salaries and pensions in Serbia's public sector. The IMF Board is expected to consider the request late in September, the statement reads. The economic indicators showed that the second quarter recorded an acceleration of economic growth, although the employment rate has continued to fall. We still expect that Serbia's real GDP will increase by 1.5 percent in 2010 and three percent in 2011, the IMF stated. The program has recorded satisfactory results: all quantitative goals for late June were achieved, including the one that refers to Serbia's fiscal deficit. The official talks between the Serbian delegation and the IMF representatives on the fifth revision of the stand-by arrangement were launched on August 23. On May 15, 2009, the IMF approved a stand-by arrangement to Serbia of about EUR 3bn, which is to expire in April 2011.

Public sector wages remain frozen

“In January 2011, salaries and pensions will be adjusted to the six month inflation, or just under three percent. In April they will be adjusted to the three month inflation and half of the GDP growth, and in October to the six month inflation,” Dragutinović specified in an interview for the Wednesday issue of Econom:east magazine.

The finance minister assessed that “this is a relatively reasonable and acceptable solution”, somewhere between the government proposal, advocated by Economy Minister Mlađan Dinkić, that salaries and pensions be unfrozen as early as this October and the original agreement with the IMF that that stay frozen until April 2011.

Dragutinović also said the fiscal responsibility bill has been fully harmonized with the IMF and that it will go before the parliament by September 20 at the latest, because this is a requirement for a successful fifth review under Serbia's stand-by credit arrangement.

The fiscal responsibility law will ensure that the fiscal deficit stays under four percent in 2011, the finance minister stressed.

A delegation of the Serbian government and the International Monetary Fund (IMF) mission reached an agreement on the fifth revision of the stand-by arrangement, including unfreezing of salaries and pensions in Serbia's public sector.

The IMF Board is expected to consider the request late in September, the statement reads.

The economic indicators showed that the second quarter recorded an acceleration of economic growth, although the employment rate has continued to fall. We still expect that Serbia's real GDP will increase by 1.5 percent in 2010 and three percent in 2011, the IMF stated.

The program has recorded satisfactory results: all quantitative goals for late June were achieved, including the one that refers to Serbia's fiscal deficit.

The official talks between the Serbian delegation and the IMF representatives on the fifth revision of the stand-by arrangement were launched on August 23.

On May 15, 2009, the IMF approved a stand-by arrangement to Serbia of about EUR 3bn, which is to expire in April 2011.