Government adopts measures to cut budget deficit

The Serbian government adopted on Thursday measures aimed at reducing the budget deficit to the level envisaged in the Law on Budget for 2012. The program adopted today is meant to save RSD 15.7bn, Serbian State Secretary for Finance Dusan Nikezic stated. Government adopts measures to cut budget deficit During a news conference following the government session, Nikezic said that savings would be achieved by redirecting budget revenues worth RSD 10.9bn and reducing discretionary expenditure worth RSD 4.8bn. Nikezic noted that the government introduced a limitation to the debt by setting guarantees at EUR 120mn instead of EUR 432.5mn as envisaged in the budget, while the debt of local creditors would be set at EUR 17.5mn instead of the envisaged EUR 115mn. The measures had to be adopted because of the 20 percent drop in budget revenues in February and not because the government spent more than was envisaged in the plans, he said. On the contrary, the government spent less than was envisaged in the budget, and the funds the government used up were by around 13 percent lower than the planned sum, but the revenues in February dropped by over 20 percent, which led to a rise in deficit, he stated. The drop of revenues in February was brought about by a decline in the economic activity due to bad weather conditions and the situation in the eurozone. The measures do not cover salaries, pensions and other social benefits from the budget, and the incentives necessary for economic growth would not be reduced either, Nikezic stated. In this way, he said, the government would be able to maintain the policy aimed at increasing economic activity. The measures adopted on Thursday would be sufficient to maintain the fiscal deficit on the planned level until the end of the year, he stated. Nikezic said that it is still too early to discuss the amount of the budget deficit at the end of March because significant revenues would flow into the budget at the end of the month, but the aim is for the deficit to remain on the same level as was agreed with the International Monetary Fund, that is, at RSD 26bn in the first quarter of the year because this is the best way to ensure macroeconomic stability. The expenditure in March would be lower than the planned amount because certain savings have been achieved through previously implemented measures aimed at reduction of discretionary expenditures, he said. Through its program, the government gave a recommendation in which it stated that all other bodies included in the consolidated budget, such as Vojvodina, local self-government, organizations of obligatory social insurance and public enterprises, should implement savings measures. The government meets in Belgrade on Thursday (Tanjug) Tanjug

Government adopts measures to cut budget deficit

During a news conference following the government session, Nikezić said that savings would be achieved by redirecting budget revenues worth RSD 10.9bn and reducing discretionary expenditure worth RSD 4.8bn.

Nikezić noted that the government introduced a limitation to the debt by setting guarantees at EUR 120mn instead of EUR 432.5mn as envisaged in the budget, while the debt of local creditors would be set at EUR 17.5mn instead of the envisaged EUR 115mn.

The measures had to be adopted because of the 20 percent drop in budget revenues in February and not because the government spent more than was envisaged in the plans, he said.

On the contrary, the government spent less than was envisaged in the budget, and the funds the government used up were by around 13 percent lower than the planned sum, but the revenues in February dropped by over 20 percent, which led to a rise in deficit, he stated.

The drop of revenues in February was brought about by a decline in the economic activity due to bad weather conditions and the situation in the eurozone.

The measures do not cover salaries, pensions and other social benefits from the budget, and the incentives necessary for economic growth would not be reduced either, Nikezić stated.

In this way, he said, the government would be able to maintain the policy aimed at increasing economic activity.

The measures adopted on Thursday would be sufficient to maintain the fiscal deficit on the planned level until the end of the year, he stated.

Nikezić said that it is still too early to discuss the amount of the budget deficit at the end of March because significant revenues would flow into the budget at the end of the month, but the aim is for the deficit to remain on the same level as was agreed with the International Monetary Fund, that is, at RSD 26bn in the first quarter of the year because this is the best way to ensure macroeconomic stability.

The expenditure in March would be lower than the planned amount because certain savings have been achieved through previously implemented measures aimed at reduction of discretionary expenditures, he said.

Through its program, the government gave a recommendation in which it stated that all other bodies included in the consolidated budget, such as Vojvodina, local self-government, organizations of obligatory social insurance and public enterprises, should implement savings measures.