The budget rebalance currently provides the best possible economic and fiscal projections, but is unlikely to be fully realized, the Fiscal Council of Serbia estimated.
The FC also considers that the “biggest and irreversible” budget rebalancing error is the payment of 100 euros to adult Serbian citizens who want it.
In its analysis, the Fiscal Council stated that it was a costly and inappropriate measure and warned that the state would borrow to finance it, and that citizens would repay the debt with interest in the coming years.
The institution estimates that the payment of 100 euros is economically inefficient, because it cannot affect the sensible and sustainable acceleration of the domestic economy, and that it is socially unfocused, since most of the funds are not directed at objectively materially disadvantaged citizens who really need help, Tanjug reports.
The FC also points out that parliamentary elections are also planned this year, following which, as a rule, a rebalance is adopted that monitors changes in the organization of the new government and states that once all this is known, the budget will have to change again.
The Fiscal Council also says a large budget deficit is projected to increase to around seven percent, which is more than three billion euros, primarily due to anti-crisis measures adopted.
The deficit is projected to increase from 166 million euros previously planned to 3.17 billion euros.
Also, as they state, the planned changes in the budget can be divided into two groups: the changes resulting from the immediate impact of the crisis and the changes resulting from the implementation of a package of measures to mitigate the economic consequences of the pandemic.
“Thus, virtually all the envisaged large increase in the deficit in 2020 can be attributed to the implementation of (justified) measures to support the economy and (unjustified) payment of 100 euros to adult citizens,” the Fiscal Council announced, Politika reports.
