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Increase in standard of living is government’s priority in 2011

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Serbian Prime Minister Mirko Cvetkovic stated Tuesday that the government’s priorities in 2011 will be the increase in the standard of living, halt of the growth in unemployment, speedy economic growth, price stability and support to the development of the real sector.

Serbian Prime Minister Mirko Cvetkovic stated Tuesday that the government’s priorities in 2011 will be the increase in the standard of living, halt of the growth in unemployment, speedy economic growth, price stability and support to the development of the real sector.

At the opening of the Kopaonik Business Forum 2011, Cvetkovic said that he expects that Serbia’s economic growth will reach the pre-crisis level already in the first half of the year.

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He pointed out that Serbia is facing a serious decline in employment and the standard of living, which is why the government will put in additional efforts in dealing with these two major problems.

We have to focus on the strategic sectors which will be the generators of export development in the post-crisis period, as the dynamic growth in Serbia’s production volume and competitiveness represents a genuine foundation for the increase in employment and the standard of living, the prime minister stressed.

Cvetkovic pointed out that Serbia’s new model of growth until 2020 indicates that the country must take resolute measures if it wants to achieve a sustainable growth in the medium-term.

“The measures have to encourage structural changes which favor the production of tradable goods, as the future economic growth can only be based on export growth,” Cvetkovic underscored.

Dinkic: EUR 85 million in investment incentives approved since 2006

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G17 Plus leader and former economy minister Mladjan Dinkic said Tuesday that Serbia has given a total of EUR 85 million in investment incentives since 2006, or EUR 20 million a year.

Addressing the Kopaonik Business Forum, Dinkic said this is five times less than the subsidies going to the state-owned Serbian Railways and eight times less than the subsidies for agriculture.

The former minister of economy and regional development noted that the subsidies are open to both foreign and domestic investors, and that they are not non-repayable because the investor must offer up a bank guarantee.

One of the key criteria when granting subsidies, according to Dinkic, is the development level of the municipality.

He added that so far, most of the money has gone to companies investing in southern Serbia.

Soskic: Inflation to hit its highest next month

National Bank of Serbia (NBS) Governor Dejan Soskic stated Tuesday that the inflation in Serbia will hit its highest rate next month, and then gradually decrease by the end of 2011.

At the ongoing 2011 Kopaonik Business Forum, Soskic said that year-on-year inflation will start dropping in those months in which the inflation rate was rather high last year, such as June, July and August.

Taking into account that Serbia’s economy is highly dependent on the euro, the country’s economic recovery will require stable prices, and the NBS is determined to use all available instruments to safeguard that, Soskic announced.

As the main challenges for reaching the targeted inflation of approximately 4.5 percent, Soskic identified inflation expectations, increase in the prices controlled by the state, international factors such as rise in the prices of energy-generating products and foodstuffs.

The NBS has successfully cooperated with the government on alleviating volatility in the price of agricultural products, Soskic said explaining that fluctuations in foodstuffs prices affect consumer price index by which the inflation is measured.

The governor noted that the banks in Serbia are fairly stable and that their capital is relatively high, but added that 17.2 percent of problematic loans in the banks’ balance sheets give rise for concern.

He underlined that the level is still not alarming, given the high level of bank reserves that should cover possible losses, and added that problematic loans constitute more than 20 percent of the loans given in the sector of economy, while the percentage is much lower as regards citizens’ loans.

Maas: Interest of German companies in investing in Serbia on increase

German Ambassador to Serbia Wolfram Maas stated on Tuesday that foreign investors, including those from Germany, have become considerably more interested in Serbia as an investment destination.

Maas said that for three and a half years of his mandate in Serbia, he never saw German companies show so much interest in investing in the country as they have demonstrated over the past six to nine months.

German investments in Serbia are for the most part aimed at small and mid-size businesses with 50 to several hundred employees, rather than at big companies.

Maas expressed satisfaction over this positive trend because Germany’s experience shows that small and medium-size businesses are the backbone of German economy and account for approximately 80 per cent of workplaces.

Speaking about the possibility of Deutsche Telekom investing into Telekom Srbija, Maas noted that this decision is exclusively a business one and that an agreement would be reached if it turns out that the two companies’ share the same interests regarding this matter.


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