Monday, June 1, 2020
Home > Production > Serbia adopts 2014 budget with heavy deficit, slow growth forecast

Serbia adopts 2014 budget with heavy deficit, slow growth forecast

Belgrade: Serbia’s parliament on Friday adopted a 2014 budget with the public deficit virtually unchanged from this year and slow economic growth forecast, as the government moves to impose a series of austerity measures.

The public deficit is estimated at 4.6 per cent of gross domestic product (GDP) for next year — compared with 4.7 per cent in 2013 — at 183 billion dinars (Dh8 billion, €1.6 billion, $2.2 billion).

The economy is predicted to expand by just 1.0 per cent with inflation at 0.5 per cent, which would be the lowest in decades.

The government led by socialist Prime Minister Ivica Dacic has announced its austerity plan for 2014, including cuts in subsidies and public administration costs, along with a tax increase and raising the retirement age for women to 63.

Serbia will need to borrow some 662 billion dinars to help cover the shortfall and settle debts in 2014, the government has said.

But the opposition has been critical of the budget plan, especially new borrowing that would increase public debt already over 60 per cent of GDP.

Finance Minister Lazar Krstic has argued that the budget was “the only one possible” given the country’s ailing economy.

Serbia is looking to secure a new loan from the International Monetary Fund (IMF), as the previous one, worth one billion euros, was frozen in February 2012 because the government at the time had not complied with its commitments.