NBS governor: Govt. has no plan for IMF

National Bank of Serbia Governor Radovan Jelasic said that the Serbian government has no detailed plan to present to the IMF mission visiting Serbia soon. The International Monetary Fund officials are expected to arrive in Serbia on August 24. NBS governor: Govt. has no plan for IMF “I only hear what the government doesn’t want, and no one is talking about what we are prepared to do, or what measures we will implement. I did not hear any concrete proposals for what we should do, other than ‘choruses’ chanting that the IMF should allow us a greater budget deficit,” Jelasic told daily Vecernje Novosti. Asked whether it is necessary to introduce added taxation on earnings which are greater than RSD 40,000 (EUR 435) per month and increase VATs to 20 percent, Jelasic said that decreasing wages which are above average would bring in a minimal income. “If we are going down that road, we should include below average wages too. At the same time, we should increase income from VATs. Only now, the situation is different from what it was in March, the budget hole is larger and it is not enough anymore to just increase the VATs by one percent,” he said. Jelasic said that if the government decides to increase VATs by two or three percent, it would "not significantly effect the price of food in the consumer basket.” “If the Value Added Taxes are increase significantly, inflation could go over the 10 percent we are aiming for,” he added. Jelasic said that the budget lacks some RSD 10-15bn (EUR 108-163mn), depending on the month, but that the payment of pensions and wages is not in danger. Jelasic said that he is upset that the government is not sticking to its plan and not respecting the measures it passed, especially the “obligation of transferring 40 percent of its own income to the budget users—so that public companies do not transfer their gains to the state budget.” He said that at this moment, Serbia’s public debt is about EUR 7.3bn. “However, the biggest problem is the speed at which new debt is arriving, which could in only two years, at this rate, increase to 50 percent and reach close to 40 percent of the GDP,” the governor said. Jelasic also said that “cheaper credit” can be expected in the fall. Radovan Jelasic (FoNet)

NBS governor: Govt. has no plan for IMF

“I only hear what the government doesn’t want, and no one is talking about what we are prepared to do, or what measures we will implement. I did not hear any concrete proposals for what we should do, other than ‘choruses’ chanting that the IMF should allow us a greater budget deficit,” Jelašić told daily Večernje Novosti.

Asked whether it is necessary to introduce added taxation on earnings which are greater than RSD 40,000 (EUR 435) per month and increase VATs to 20 percent, Jelašić said that decreasing wages which are above average would bring in a minimal income.

“If we are going down that road, we should include below average wages too. At the same time, we should increase income from VATs. Only now, the situation is different from what it was in March, the budget hole is larger and it is not enough anymore to just increase the VATs by one percent,” he said.

Jelašić said that if the government decides to increase VATs by two or three percent, it would "not significantly effect the price of food in the consumer basket.”

“If the Value Added Taxes are increase significantly, inflation could go over the 10 percent we are aiming for,” he added.

Jelašić said that the budget lacks some RSD 10-15bn (EUR 108-163mn), depending on the month, but that the payment of pensions and wages is not in danger.

Jelašić said that he is upset that the government is not sticking to its plan and not respecting the measures it passed, especially the “obligation of transferring 40 percent of its own income to the budget users—so that public companies do not transfer their gains to the state budget.”

He said that at this moment, Serbia’s public debt is about EUR 7.3bn.

“However, the biggest problem is the speed at which new debt is arriving, which could in only two years, at this rate, increase to 50 percent and reach close to 40 percent of the GDP,” the governor said.

Jelašić also said that “cheaper credit” can be expected in the fall.