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Construction is the driving force of economic growth in Serbia

Following another visit by the IMF mission, led by Jan Kes Martein, Serbia received good grades, due to its record low unemployment and the expected economic growth in 2020 of 4%.

Serbian Finance Minister Sinisa Mali said at a joint press conference that the International Monetary Fund was satisfied with the progress of reforms and results achieved in Serbia and confirmed the projected economic growth of 3.5% for this year.

he construction industry will further boost GDP growth, which is also indicated by data on construction permits issued and data on contract work, on the basis of which the sector is expected to grow by more than 20% in the last two quarters, said Sinisa Mali.

According to the Minister of Finance, real wage growth in the first half of this year was 7.3%, driven mainly by wage growth in the private sector: “We are on a stable footing, our public finances are absolutely sound,” he said.

According to him, the Serbian government will present a draft budget for 2020 within ten days.

“It will be a development-oriented budget. We already have a list of projects on which we will continue to work. We have allocated funds for the Moravian corridor, for the section Pojate – Preljina, for the construction of the highway Belgrade – Sarajevo, for the construction of the section Ruma – Sabac – Loznica, for the section Obrenovac – Ljig, Surčin – Obrenovac, Novi Beograd – Surčin, for the Belgrade ring road, i.e. for the completion of the section from Ostružnica to Bubanj, for the Novi Sad – Ruma road and finally for major investments in railways,“ he added.

According to him, the public deficit of 0.5% of GDP is expected in 2020: “This level of deficit ensures a continuous reduction in the share of public debt in our GDP,” explained the Minister, adding that the government had also decided to reduce wage contributions 62% to 61 %.

The Minister recalled that, in the first nine months, the state budget surplus was 49.9 billion dinars, which is 63.2 billion better than expected:

“This is exactly the reason why we have had a budgetary adjustment; we have directed the surplus of money towards greater capital investments, towards the increase of public sector wages and towards the payment of a one-off financial bonus to pensioners”.

According to him, Serbia is on the threshold of another record year in terms of foreign direct investments. In the first seven months, they amounted to €2.3 billion, 43% more than in the same period last year.

In response to Volkswagen’s decision to postpone the construction of a factory in Turkey, the Minister said that it would be of great importance for Serbia to attract such an investment.

Volkswagen’s Board of Directors has postponed the decision to build a new facility in Turkey because of “Ankara’s military action in Syria”.

Source; Serbian Monitor