"Economic growth starting in second quarter"

"Economic growth starting in second quarter"

Vujovic underlined that the government's reforms have already begun to yield results, adding that the fiscal deficit in July 2014 amounted to 8.8 percent of the GDP, with a tendency of further growth, and today after eight months it has been reduced to 6.6 percent of the GDP.

The economic growth is the government's priority task, and the necessary, significant growth of the real sector can be expected once the reforms yield results, Vujovic said on the Kopaonik Business Forum.

Vujovic said that economic growth must be based on real, sustainable basis, because in the period from 2005 to 2014, the GDP growth was based on donations and proceeds from privatization, which was not sustainable.

At the same time from 2005 to 2015, spending was constantly rising, while revenues were falling and therefore the government needed to introduce austerity measures and stop the growth of the fiscal deficit, he said.

As for the public debt, Vujovic said that the government forecasts that the public debt will increase by the end of 2016 and then start to fall.

The government plans to increase the participation of the dinar share in the debt to around 40 percent, whereby there is sufficient dollar liquidity to service the debt, said the minister of finance, and announced that this year the government will start hedging, which may reduce the risk of losses caused by fluctuations in the currency rates.

The economy needs to be modernized, because it cannot act in line with some of the contracts it needs to fulfill, and the government cannot do it instead of the economy, Vujovic said, adding that the government will no longer be a source of financial aid to the economy, but it will provide conditions for doing business.

The finance minister said that Serbia could have a lasting growth in the fields of agriculture, manufacturing, IT and automotive industries.