NBS: Budget deficit up to five percent of GDP

The National Bank of Serbia (NBS) estimates that the deficit in the Serbian budget will be between 4.5 and five percent of GDP by the end of the year.

Izvor: Tanjug

Thursday, 30.05.2013.

20:56

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BELGRADE The National Bank of Serbia (NBS) estimates that the deficit in the Serbian budget will be between 4.5 and five percent of GDP by the end of the year. “Any deficit of more than three percent is a big warning. The NBS does not want to act panicky, and we are rather talking about the necessity of implementing systemic reforms and savings,” central bank Governor Jorgovaka Tabakovic also said on Thursday. NBS: Budget deficit up to five percent of GDP As early as in the first quarter of this year, it appeared that the planned deficit of 3.6 percent of GDP is hardly attainable, the NBS governor told reporters after a meeting with representatives of the AmCham Serbia in Belgrade on Thursday. The governor said that the NBS estimates are realistic and conservative, and that they include government-proposed fiscal consolidation measures. Tabakovic said that a wage freeze in the public sector, given the number of employees in the sector, is one of the easiest ways to save money. “I believe that the Ministry of Finance and the government will find a way to implement measures that would contribute to the preservation of sustainability of public finances, since the macroeconomic and financial stability can be only be secured in the condition of responsible fiscal and monetary policies and their good coordination,” said Tabakovic. This would leave more space for monetary policy to ensure stability of prices with lower interest rates, she said. The NBS fully supports the idea to conclude a new arrangement with the International Monetary Fund (IMF), said the NBS governor. Tabakovic reiterated that the inflation rate will be returned within the boundaries of the targeted band, which is four plus or minus one and a half percent by October this year, stressing that the NBS is still cautious about relaxing the monetary policy, bearing in mind the existing risks. The financial sector is very stable despite the high participation of non-performing loans, she said. The NBS governor also announced making amendments to the Insurance Law, adding that the NBS will try to work together with the market actors to arrive at an as good as possible a draft to be forwarded to the parliament. Tanjug

NBS: Budget deficit up to five percent of GDP

As early as in the first quarter of this year, it appeared that the planned deficit of 3.6 percent of GDP is hardly attainable, the NBS governor told reporters after a meeting with representatives of the AmCham Serbia in Belgrade on Thursday.

The governor said that the NBS estimates are realistic and conservative, and that they include government-proposed fiscal consolidation measures.

Tabaković said that a wage freeze in the public sector, given the number of employees in the sector, is one of the easiest ways to save money.

“I believe that the Ministry of Finance and the government will find a way to implement measures that would contribute to the preservation of sustainability of public finances, since the macroeconomic and financial stability can be only be secured in the condition of responsible fiscal and monetary policies and their good coordination,” said Tabaković.

This would leave more space for monetary policy to ensure stability of prices with lower interest rates, she said.

The NBS fully supports the idea to conclude a new arrangement with the International Monetary Fund (IMF), said the NBS governor.

Tabaković reiterated that the inflation rate will be returned within the boundaries of the targeted band, which is four plus or minus one and a half percent by October this year, stressing that the NBS is still cautious about relaxing the monetary policy, bearing in mind the existing risks.

The financial sector is very stable despite the high participation of non-performing loans, she said.

The NBS governor also announced making amendments to the Insurance Law, adding that the NBS will try to work together with the market actors to arrive at an as good as possible a draft to be forwarded to the parliament.

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