Economic Summit: Budget review, consumer debt, EU membership

Serbian Finance Minister Lazar Krstić said on Tuesday that he believes a revision of the country's budget will be adopted in August or in mid-September.

Source: Tanjug
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This will take place "after the flood damage estimates and assessment of their effect on the state budget are completed."

The Finance Ministry is in contact with the World Bank and the European Union as regards the damage estimates, and with the International Monetary Fund regarding the assessment of effects of the floods on the state budget, said Krstić addressing the participants of the 14th Economic Summit in Belgrade.

The minister added that he expects a three-year stand-by arrangement with the IMF to be concluded in the fall, Tanjug, who is the conference's media partner, reported.

"16 times less"

The average indebtedness of a Serbian citizen stands at EUR 750, which is around 16 times less than the average indebtedness per EU citizen and five times less than in Croatia, said Veroljub Dugalić, secretary general of the Association of Serbian Banks.

According to the data that Dugalić presented at the 14th Economic Summit in Belgrade on Monday, the average loan debt in the EU stands at EUR 12,000 per capita and around EUR 4,000 in Croatia.

“Our loans are not expensive, it is rather that our standard is low. Our average salary stands between EUR 350-370, and there is no affordable loan with such incomes,” Dugalić said.

Commenting on the interest rates in Serbia, he said that it is impossible that they could be the same as in Austria, Germany or Croatia mostly because of high reference interest rate, high share of non-performing loans and mandatory reserves.

Although the reference interest rate has been reduced to 8.5 percent, it is much higher than the reference interest rate in Slovakia, which stands at 0.25 percent, or in the EU, where it amounts to 0.15 percent, Dugalić said.

Commenting on non-performing loans, he said that their share in the overall commercial loans stands at 28.2 percent and in the personal loans 9.1 percent.

“This is one of the worst indicators in Europe, since every third loan is not repaid, and the banks provide for 100 percent mandatory reserves, which is a major spending,” Dugalić said.

"Complementary processes"

The EU integration and Serbia's economic rebound are two complementary processes given that the harmonization with the EU acquis leads to the improvement of business environment and encourages foreign investors, it was stated at the 14th Serbian Economic Summit.

Jadranka Joksimović, Serbian minister without portfolio in charge of the EU integration, stated on Monday that all regional countries have it in common to view the living standard and creation of jobs as priority issues which, as she underlined, require serious systemic reforms.

The bills which will be passed soon will create a better business environment in Serbia and also be a step forward in the EU integration process, she said.

Joksimović said that the figures most clearly indicate the interdependence between the EU integration and economic growth, adding that since the signing of the Agreement on Stabilization and Association, Serbia's export went up by 71 percent from EUR 4 billion in 2008 to EUR 6.9 billion in 2013, while the export-import ratio increased from 40.4 percent to 72.25 percent in the respective period.

Head of the EU Delegation to Serbia Michel Davenport stated that Serbia, with the help of the EU and commitment to reforms, can rise to the challenge it is facing at the moment and grow even stronger.

Serbia can count on the EU and its assistance in strengthening of the economy and improvement of the business environment, and the EU will be the greatest donor when it comes to dealing with the aftermath of the floods, Davenport said.

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