State Secretary with the Ministry of Finance Dusan Nikezic said there is no indication Serbia will have trouble financing its budget deficit this year.
“Thanks to our cash reserves and financial investors’ positive attitude toward Serbia, the budget deficit will be invested entirely in infrastructure projects, agricultural development and economic incentives,” Nikezic said in an interview for the Monday edition of the daily Politika.
This will enable us to invest the entire debt into the country’s future and raising living standards, Nikezic explains.
He said all reports and recommendations of the Fiscal Council are carefully analyzed and built into the country’s economic policy.
“It was on the basis of the economic growth forecast of 1.5 percent, which the Fiscal Council put out in November, that the government drafted the 2012 budget. The government also accepted the Council’s recommendation that the budget deficit be 4.25 percent, which is lower that the fiscal rule, in order not to risk violating the fiscal rule on the public debt ceiling,” Nikezic said.
Asked if after the International Monetary Fund’s (IMF) estimate that the economic growth will be 0.5 percent, he still claims it will be 1.5 percent, he said Serbia has an additional reserve for growth this year in the start of serial production at Fiat and the operationalization of last year’s significant investments in production.
Nikezic said he is not concerned about the warnings found in the Fiscal Council’s latest report that Serbia’s public debt could exceed 60 percent of the GDP by 2015.
“I am not concerned, because the warnings reflect a pessimistic scenario in which the government takes no measures aimed at reducing the deficit and public debt, while it is evident this government is already doing so and continuing to implement a responsible economic policy. This was confirmed by the IMF in its latest report, which gave a positive evaluation of the way the government has prevented negative effects of the lower economic growth in the second half of 2011,” Nikezic said.
Source Emg
