Finance Minister Sinisa Mali said on Wednesday that the draft budget for 2019 was balanced with a planned increase of public sector wages and pensions.
This would improve the living standard of citizens, and more public investments, which would contribute to economic growth and a higher employment rate, Mali said, Beta agency reported.
Explaining the 2019 draft budget before the parliament, Mali said that a set of accompanying financial laws would ensure tax relaxations and boosting competitiveness and attractiveness of Serbia’s economy.
Budget revenues are projected at RSD 1,246.2 billion and spending at RSD 1,269.1 billion, with a deficit planned at RSD 22.9 billion, or 0.4 percent of the expected Gross Domestic Product (GDP).
The draft budget has been projected based on the estimate that GDP will grow 3.5 percent next year, and 2.3 percent inflation.
“Fiscal consolidation shall ensure a further decrease of the public debt’s share in GDP, from 56.6 percent to below 50 percent next year,” Mali said.
He added that public sector wages will be increased by between seven and 12 percent as of Jan. 1, 2019, so that the total fund for salaries at all levels of government in 2019 will be up RSD 33 billion from the 2018 fund, while allocations for pensions from the budget and the Pension and Disability Insurance Fnd would be increased by RSD 35 billion.
“In 2019, allocations for capital investments from the republican budget and local self-government budgets will total RSD220 billion, up 30 percent from 2018,” Mali noted, adding that the fund would go for the construction of road and railway infrastructure as well as for investments in science and technology parks and health institutions.
Mali said that labor burden will be decreased from 63 to 62 percent, which would result in decreased budget revenues by RSD12 billion.
“A new law on labor burden will unify and decrease taxes and contributions, which will guarantee the predictability of these expenditures,” Mali said.
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