Serbia needs to achieve economic growth of 5 percent annually to boost employment, or double this year’s expected growth rate, and will rely heavily on foreign investment to achieve that aim, Prime Minister Mirko Cvetkovic said on Wednesday.
“This is our strategic goal that needs to be achieved in the coming years,” Cvetkovic told a business forum in Belgrade on Wednesday.
“We are aware that Serbia’s current development is insufficient for a boost of employment and a rise in the living standards … we need sustainable annual growth of 5 percent for that,” Cvetkovic said.
Serbia’s economy is forecast to grow by just 2 percent this year and 3 percent next year, according to a 1 billion euro stand-by deal Belgrade agreed with the IMF last month.
Unemployment in the country of 7.3 million stands at 20 percent, and unions say as many as 150,000 people may lose their jobs in the coming months as the economy is slowing.
Serbia, which aims to join the European Union and hopes for candidacy status by late October, targets about $2 billion in foreign investments this year, including revenues from an automotive factory in the central city of Kragujevac operated by Italy’s carmaker Fiat .
Cvetkovic said that the start of Fiat’s production line with an annual output of 200,000 cars scheduled for late 2011, would serve as an incentive for other major investors.
Under the terms of its stand-by loan, Serbia targets a budget deficit of 4.6 percent of GDP in 2011 and 3.9 percent of GDP for 2012.
To fill the budget gap, the country has resorted to selling dinar and euro-indexed treasury bonds and plans to issue a 700 million euro debut Eurobond by early October.
Cvetkovic’s economic advisor Jurij Bajec said the government was likely to avoid excessive spending ahead of elections. “The reason is — there’s no money to spend,” he said.Â
Source balkans.com
