Jelašić: No end of crisis before 2011

Serbia is not on the verge of bankruptcy, but it cannot expect to get out of the economic crisis before 2011, NBS Governor Radovan Jelašić says.

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Saturday, 21.03.2009.

12:18

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Serbia is not on the verge of bankruptcy, but it cannot expect to get out of the economic crisis before 2011, NBS Governor Radovan Jelasic says. The central bank chief said that the negotiations with the International Monetary Fund (IMF) for a new arrangement are ongoing, focusing on ways to secure better payment of budget revenues and decreasing public spending. Jelasic: No end of crisis before 2011 He said that the government must choose a way to make savings in the budget, but that it is most important to do so quickly. Jelasic also stated that even if Serbia received EUR 1.5bn in FDI this year, it would still be some EUR 3bn short for covering the payment deficit. “If this money is not coming from an added exterior source, then the money must reflect on the foreign currency reserves, and it will reflect on the exchange rate as well,” Jelasic said. “We have one question – to what extent will the budget spending be cut, and based on that, we will need added budget financing, and we have a problem here of some three billion,” he said. Commenting on the proposal to introduce a form of "solidarity taxes", which would secure money through added taxation of higher income to help citizens who are hit hardest by the economic crisis, Jelasic said that such measures must be effective and implemented quickly. The NBS governor said that there is "no place for prognosis that Serbia is on the verge of bankruptcy", but that "people should be prepared that we will not get out of the crisis until 2011". “Everyone expects some improvement no sooner than in 2010, but we must be aware, that unless people abroad get out of the crisis in 2010 and start ordering more automobiles and wood floors or some other product manufactured in Serbia, and then when we have a reason to produce again, not to fill up storage space, but because there is demand, without this, it is hard to see economic improvement, and I am talking about economic growth before 2011,” Jelasic was quoted as saying. Radovan Jelasic (FoNet, archive)

Jelašić: No end of crisis before 2011

He said that the government must choose a way to make savings in the budget, but that it is most important to do so quickly.

Jelašić also stated that even if Serbia received EUR 1.5bn in FDI this year, it would still be some EUR 3bn short for covering the payment deficit.

“If this money is not coming from an added exterior source, then the money must reflect on the foreign currency reserves, and it will reflect on the exchange rate as well,” Jelašić said.

“We have one question – to what extent will the budget spending be cut, and based on that, we will need added budget financing, and we have a problem here of some three billion,” he said.

Commenting on the proposal to introduce a form of "solidarity taxes", which would secure money through added taxation of higher income to help citizens who are hit hardest by the economic crisis, Jelašić said that such measures must be effective and implemented quickly.

The NBS governor said that there is "no place for prognosis that Serbia is on the verge of bankruptcy", but that "people should be prepared that we will not get out of the crisis until 2011".

“Everyone expects some improvement no sooner than in 2010, but we must be aware, that unless people abroad get out of the crisis in 2010 and start ordering more automobiles and wood floors or some other product manufactured in Serbia, and then when we have a reason to produce again, not to fill up storage space, but because there is demand, without this, it is hard to see economic improvement, and I am talking about economic growth before 2011,” Jelašić was quoted as saying.

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