Wage and pension hikes not to endanger Serbian budget

The upcoming hike of public sector wages and pensions will not endanger the budget since there is room for the increase, FinMin Sinisa Mali said in an interview with today’s edition of the daily Vecernje Novosti. He noted that accurate calculations about the increase will be ready soon, adding that no budget revision will be needed because of the hikes. Mali noted that the law on temporary reduction of above-average pensions will be abolished, which means that pensions will increase before the end of the year, most probably in November.

A mission of the IMF will arrive in Serbia in the second half of September and we will present more specifics after these talks that will not be easy, Mali said. He added that the ban on employment in the public sector will also be among the topics of discussion with the IMF.

Among the upcoming measures to facilitate doing business, the finance minister mentioned reduction of the VAT refund period, reduction of the fiscal burden on wages, adoption of a special package of tax incentives for innovative activities. He also said that a major reform of the Tax Administration is underway.

Mali also said that GDP grew by 4.5% y/y in H1, which is the highest GDP growth rate in the first half of the year in the past decade. He noted that the budget surplus stood at RSD49.1bn in Jan-Jul compared to planned deficit of RSD16.7bn for the period.

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