Serbia on its way to sustainable public debt level – No room for tax and contribution cuts in 2017

Source: Tanjug/Beta Sunday, 04.12.2016. 15:45
(Photo: Nonwarit/
Minister of Finance Dusan Vujovic says that savings measures would be counterproductive and that Serbia is on its way to reaching a sustainable level of the public debt and the deficit.

– This doesn’t mean that there are no problems left, but that we have accomplished more than we’ve planned. We are entering a zone from which we can look to the future with much more certainty – Vujovic said.

According to him, Serbia is on its way to reaching a sustainable level of the public debt. He adds that no one expects the economic growth of 3%.

Vujovic repeats that an economic growth of 2.7% to 2.8% is expected this year.

The minister of finance also says that he expects a record low budget deficit in 2017 of 1.7% of the GDP and adds that the share of the public debt in the GDP will be reduced to 72.8% at the end of next year.

Vujovic says that next year’s budget doesn’t envision tax and contribution cuts, as there is no possibility for it, and adds that the ban on employments in the public sector will remain in effect.

– We are gradually reducing the discrepancy between the income and the expenditures in the budget, which means that the difference in the purchase power between our citizens and citizens of European countries will be reduced as well – Vujovic said and added that the economic growth would lead to a reduction of the share of salary expenditures in the budget, with the aim of having them be around 8% of the GDP.

The projected inflation for 2017 will be 2.4%, due to the growth of certain prices under control of the state, Vujovic pointed out.

– The public debt in 2017 should be 72.8% of the GDP, which is only 0.7% less compared to this year, but it’s important that it is on its way down to making up 60% of the GDP, according to the Maastricht rules – he said and added that financial discipline would improve and that all deadlines related to the budget on all levels would be honored.

Vujovic pointed out that budget subsidies would continue to be approved and that they would be used to support the restructuring of public enterprises up to the point where they can take care of themselves.

RTS to remain budget-funded

The public media service will continue to be partially funded by the state budget in 2017, as its own revenues are not as high as expected, said Minister Vujovic.

– We will continue to support the public service next year as well. We expected that it would be able to fund itself from its revenues to a much greater extent, but the results are not as good as expected – Vujovic said.

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