"IMF funds could be used to support budget"

NBS Governor Radovan Jelašić says that it if it "makes a good program" with the IMF, Serbia might next year use IMF funds for budget support.

Izvor: B92

Tuesday, 11.08.2009.

09:28

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NBS Governor Radovan Jelasic says that it if it "makes a good program" with the IMF, Serbia might next year use IMF funds for budget support. In the present situation when Serbia is RSD 10-15bn short every month, while the annual deficit could amount to RSD 140-50bn, he told B92 TV. "IMF funds could be used to support budget" The IMF funds are the cheapest way of financing the budget deficit, but the state must propose specific measures, such as increasing VAT and reducing salaries and social payments, he said. If the government goes with the business community and cuts VAT, it must not draw new debts, he said. "There are two alternatives in this situation. One is VAT, and the other is [decreasing ]salaries and social spending. Unless it's salaries and social spending, there's only the alternative to increase VAT." Although Serbia's public debt is low compared to other countries, the rate of debt contracting is high, he said. Inflation by the end of the year should not exceed the planned eight to ten percent, the governor concluded.

"IMF funds could be used to support budget"

The IMF funds are the cheapest way of financing the budget deficit, but the state must propose specific measures, such as increasing VAT and reducing salaries and social payments, he said.

If the government goes with the business community and cuts VAT, it must not draw new debts, he said.

"There are two alternatives in this situation. One is VAT, and the other is [decreasing ]salaries and social spending. Unless it's salaries and social spending, there's only the alternative to increase VAT."

Although Serbia's public debt is low compared to other countries, the rate of debt contracting is high, he said.

Inflation by the end of the year should not exceed the planned eight to ten percent, the governor concluded.

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