Inflation in Serbia could be around eight percent at the beginning of the year

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In order to stop the growth of prices during 2022, it is necessary for the Government of Serbia to go to the lowest possible fiscal deficit, to avoid indiscriminate payments to all citizens or all pensioners and not to increase extraordinary salaries in the public sector, said today the President of the Fiscal Council Pavle Petrovic.
Although all forecasts are currently ungrateful, inflation could be around 8% at the beginning of the year, and if the Government and the National Bank of Serbia (NBS) pursue responsible economic policies, price growth could return by the end of 2022 by three percent, Petrovic said.
He assessed that an important indicator that shows that inflation can return to control is that core inflation – without energy, food, alcohol and cigarettes, remained relatively low, at the level of three percent.
According to Petrovic, there are three directions in which fiscal policy should go, and the first is to reduce the fiscal deficit in this and next years and return the budget to balance, which would then reduce the country’s excessive public debt and have a positive effect on inflation.
As another direction, he sees the need to responsibly and systematically regulate public finances, which means reading through reforms that have not been implemented for years.
It is necessary to regulate the system of salaries and employment in the public sector, adopt new fiscal rules, improve selectivity in selection and efficiency in the execution of public investments, reform the tax system, put public and state enterprises in order. I would especially like to emphasize the reforms of public and state-owned companies here, because they undermine economic growth instead of encouraging it, and large funds are allocated from the budget for them every year, said Petrovic.
He specified that these funds are constantly allocated for Resavica and Zeleznica, some years for Srbijagas, some for Air Serbia, now it will obviously be for Elektroprivreda Srbije, and the Government will not be able to cope with that.
The third important direction of fiscal policy refers to broader and more complex social challenges, which can be solved only through thoughtful and strategic policies and not by ad-hoc measures. These include population policy, aging, the emigration of able-bodied and skilled people, inequality and poverty, climate change, environmental pollution, the education system and the general health of the population. The indicators that currently describe these areas in Serbia are devastating, concluded Petrovic, Danas reports.

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