Govt. adopts 2009 budget memorandum

The government has adopted a memorandum for both the budget and economic and fiscal policy for 2009, together with projections for 2010 and 2011. The strategic partnership deal between Fiat and Zastava has also been adopted, enabling work to begin on a contract to formally confirm the heralded boost to the national automotive industry. Govt. adopts 2009 budget memorandum The cooperation memorandum with Fiat was approved unanimously by all the ministers of the outgoing government, enabling work to begin on finalizing an agreement with the Italian company with immediate effect. According to Economy Minister Mladjan Dinkic, the first step will be to turn Zastava’s debt into capital, and transform it from a public to a state company, albeit briefly. Deputy Prime Minister Bozidar Djelic told a press conference after the cabinet meeting that the budget memorandum would strategically define the direction of the country’s development. He said that the plan was to cut last year’s inflation rate of 10.1 percent to four percent by 2011, which would put Serbia on a level footing with EU member-states. Djelic said that the public spending-GDP ratio would also be cut from 43.8 to 40 percent. That would mean that public financing was balanced, leaving a small surplus at the end of the period, and that if Serbia confirmed this economic policy course, there would be no chance of a credit crisis, and that, on the contrary, debts would be paid off more easily, while public debt would be slashed to about 20 percent of GDP, one of the lowest rates in Europe, the deputy prime minister outlined. “We expect this economic growth to lead to an increase in GDP from USD 5,400 per citizen in 2007 to USD 9,300 by 2011, an increase of some 70 percent,” Djelic said. He said that a strong macro-economic framework and economic growth provided the foundation for the largest investment cycle in Serbia’s history, and that the memorandum envisaged investments worth about EUR 10bn a year. A third of these assets would be secured from public financing, and the intention was to use this money for Corridor 10, the highway to Montenegro, the Belgrade bypass, and bridge construction. He said that a further third would be secured from direct investments, while the rest of the money would consist of loans from international financial institutions and the capital market.

Govt. adopts 2009 budget memorandum

The cooperation memorandum with Fiat was approved unanimously by all the ministers of the outgoing government, enabling work to begin on finalizing an agreement with the Italian company with immediate effect.

According to Economy Minister Mlađan Dinkić, the first step will be to turn Zastava’s debt into capital, and transform it from a public to a state company, albeit briefly.

Deputy Prime Minister Božidar Đelić told a press conference after the cabinet meeting that the budget memorandum would strategically define the direction of the country’s development.

He said that the plan was to cut last year’s inflation rate of 10.1 percent to four percent by 2011, which would put Serbia on a level footing with EU member-states.

Đelić said that the public spending-GDP ratio would also be cut from 43.8 to 40 percent.

That would mean that public financing was balanced, leaving a small surplus at the end of the period, and that if Serbia confirmed this economic policy course, there would be no chance of a credit crisis, and that, on the contrary, debts would be paid off more easily, while public debt would be slashed to about 20 percent of GDP, one of the lowest rates in Europe, the deputy prime minister outlined.

“We expect this economic growth to lead to an increase in GDP from USD 5,400 per citizen in 2007 to USD 9,300 by 2011, an increase of some 70 percent,” Đelić said.

He said that a strong macro-economic framework and economic growth provided the foundation for the largest investment cycle in Serbia’s history, and that the memorandum envisaged investments worth about EUR 10bn a year.

A third of these assets would be secured from public financing, and the intention was to use this money for Corridor 10, the highway to Montenegro, the Belgrade bypass, and bridge construction.

He said that a further third would be secured from direct investments, while the rest of the money would consist of loans from international financial institutions and the capital market.