Central bank governor criticizes budget

Central bank governor criticizes budget

He added that Serbia’s 2007 budget represented a mere prolongation of the 2006 “election-campaign” budgetary policy which it was not sufficiently restrictive.

“I have never heard that any state except Serbia planned a 13.6 percent increase in salaries. If the Serbian economy is not competitive, everyone will point the finger at the National Bank [NBS],” Jelašić said.

He stressed he had not so far met any experts that approved of the budget, adding he was certain that politicians who proposed it “knew very well it was not good.”

“The 13.6 percent increase in salaries following an expected 6.5 percent inflation rate would mean salaries would go up by 20 percent.”

“It will not contribute to our economic competitiveness but only have a negative effect on export, since it will increase imports and additionally threaten the deficit rate,” Jelašić argued.

The governor said that politicians counted on the NBS to undertake unpopular restrictive measures.

“We will again have the same story when the NBS turns out to be ‘the bad guy’ in comparison with ‘the good’ government,” he remarked.

Nonetheless, Jelašić pledged to maintain monetary stability and keep the inflation at bay.