Today, the Governor of the National Bank of Serbia (NBS), Jorgovanka Tabakovic, welcomed the proposal of the new rebalance of the budget for 2021 and added that the NBS considers the rebalance of the budget justified, and the reason for the rebalance extremely important.
Speaking at the Committee on Finance, Republic Budget and Control of Spending Public Funds, Tabakovic pointed out that in relation to the rebalance from April this year, the growth projection was increased from six percent to the current seven percent.
Among other things, she adds, the reason for higher growth than previously projected in the first half of the year are the effects of measures to support the economy and citizens.
Tabakovic stated that the revenues from this rebalance are significantly higher than previously projected due to more favorable trends on the labor market, better business results of the economy and faster recovery of final consumption.
She also pointed out that the deficit of the republic budget is as much as two percent of the gross domestic product lower in relation to the first rebalance from April 2021.
The governor said that with this rebalance, additional support to citizens is important in order to mitigate the consequences of the pandemic, and even greater productive capital investments.
In addition, she points out that the share of public debt in the gross domestic product remains below 60 percent, more precisely, it is planned at 58.2 percent.
Speaking about the rebalance from the point of view of monetary policy, Tabakovic pointed out that the fact that the increase in salaries in the public sector is slower than the projected growth of nominal GDP for this year, the NBS considers important both from the aspect of inflation and sustainable economic growth.
“We consider the determination of the Government of Serbia to continue increasing capital expenditures, which will be around 7.8 percent of gross domestic product at the general government level, an important element in the growth of total fixed investments, whose share in the coming years will be over 25 percent of gross domestic product,” said Tabakovic.
The NBS, she adds, positively evaluates the financing of the budget through five-year, seven-year and twelve-year dinar bonds, as well as through green Eurobonds.
Apart from providing financing at the lowest interest rates on those two bases, and contributing to the dinarization strategy, Tabakovic explains that they supported the further development of the domestic financial market and placed emphasis on projects that improve the environment.
“Five-year, seven-year and twelve-year dinar bonds of Serbia are included in the prestigious index of JP Morgan this year,” Tabakovic reminded, Politika reports.
