Serbia, IMF to discuss budget revision

IMF Mission Chief Albert Jaeger has stated that main topics during Serbia’s negotiations with the IMF will be budget revision and fiscal framework for 2011.

Izvor: Politika

Sunday, 10.10.2010.

16:57

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IMF Mission Chief Albert Jaeger has stated that main topics during Serbia’s negotiations with the IMF will be budget revision and fiscal framework for 2011. “What we agreed upon last time is that the deficit in the state budget until the end of the year will be 6bn lower than planned,” he stressed. Serbia, IMF to discuss budget revision “The government will have to decide what is most important,” the IMF Mission chief told daily Politika. “If payment of bonuses to pensioners will cost the budget 7bn and 2bn have already been provided from the public companies’ profit, then it means that RSD 1.5bn remains available for everything else. That’s room for re-tailoring of consumption,” he pointed out. According to Jeager, several ministers made various suggestions on how to spend the money, on pensions, subventions, incentives for agriculture. “The government has to decide how it wants to spend the money. It’s a matter of priority. You will now have to choose what’s most important. We won’t interfere with that,” he was quoted as saying. The head of the IMF Mission also added that it was not a large amount but that allocation of money was “complicated because Serbia has a coalition government” and therefore “priorities are diluted”. He explained that it was very hard to say how much prices will rise until the end of the year in Serbia, but that it was obvious that it would be much higher than everybody had hoped for until recently. Jaeger said that the largest amount of money was being spent on wages and pensions while very little money was being spent on public investments, which needed to change. “This will generally be the main task now, to encourage both domestic and foreign investors to invest money in Serbia. I believe that your government will implement rules of the fiscal stabilization that include increase of money for public investments. This will affect the economic growth,” the head of the IMF Mission pointed. He has assessed that “Serbia’s emerging from recession is not going so bad compared to the countries of the region”. “Economic recovery continues, it’s not as strong as it was expected, but it’s going in the right direction. If you ask who will invest in such situation, it will be the state, the private sector and foreign investors,” Jaeger concluded.

Serbia, IMF to discuss budget revision

“The government will have to decide what is most important,” the IMF Mission chief told daily Politika.

“If payment of bonuses to pensioners will cost the budget 7bn and 2bn have already been provided from the public companies’ profit, then it means that RSD 1.5bn remains available for everything else. That’s room for re-tailoring of consumption,” he pointed out.

According to Jeager, several ministers made various suggestions on how to spend the money, on pensions, subventions, incentives for agriculture.

“The government has to decide how it wants to spend the money. It’s a matter of priority. You will now have to choose what’s most important. We won’t interfere with that,” he was quoted as saying.

The head of the IMF Mission also added that it was not a large amount but that allocation of money was “complicated because Serbia has a coalition government” and therefore “priorities are diluted”. He explained that it was very hard to say how much prices will rise until the end of the year in Serbia, but that it was obvious that it would be much higher than everybody had hoped for until recently.

Jaeger said that the largest amount of money was being spent on wages and pensions while very little money was being spent on public investments, which needed to change.

“This will generally be the main task now, to encourage both domestic and foreign investors to invest money in Serbia. I believe that your government will implement rules of the fiscal stabilization that include increase of money for public investments. This will affect the economic growth,” the head of the IMF Mission pointed.

He has assessed that “Serbia’s emerging from recession is not going so bad compared to the countries of the region”.

“Economic recovery continues, it’s not as strong as it was expected, but it’s going in the right direction. If you ask who will invest in such situation, it will be the state, the private sector and foreign investors,” Jaeger concluded.

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