New liabilities and non-transparent budget

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The President of the Fiscal Council, Pavle Petrović, estimated that in 2023, Serbia will have to borrow three to four billion euros and that the republic’s budget is non-transparent

Due to the budget deficit, due to the debt of four billion euros coming due, Serbia will certainly have to borrow an additional three to four billion euros next year at interest rates of at least seven percent, said the president of the Fiscal Council, Pavle Petrović, at the session of the parliamentary Committee for Finance, Republic Budget and Control of Spending of Public Funds.

He explained that “Serbia should aim for public debt to be 50 percent of GDP.” He also said that public investments have been significantly increased in the last three to four years and assessed that this increase is desirable and good, and that even in crisis years, such as the next one, one should not save on investments, because it is the only a source that could sustain economic growth.

Non-transparent budget

He assessed that the Final Budget Account for 2021 is not transparent enough and cited as an example the budget loans that amounted to 430 million euros in 2021, “but the budget does not show what is behind those loans”. He stated that “research work was needed” to discover that of the 430 million euros, 300 million were intended to finance gas imports.

Petrović cited the Office for the Management of Public Investments as an example of non-transparency and pointed out that “there is no list for about 200 million euros on which projects are spent and how much was spent”. He also pointed out that around 200 million euros are allocated for fines and penalties per year, which is “extremely unproductive”.

Benefits without economic coverage

Petrović said that during the covid crisis in 2020 and 2021, the state borrowed almost six billion euros for “large grants” and that most of these funds were used to support the population and the economy.

“I hope that the benefits that existed this year for young people without any economic and social justification, and are fiscally costly, will not be extended in 2023”, Petrović said.

The Fiscal Council believes that the main cause of inflation in Serbia is the world crisis, but stated that higher public spending had an additional impact, partly due to indiscriminate giving.

The members of the parliamentary committee adopted a conclusion by which they propose to the Serbian Parliament to accept the Report on the work of the Fiscal Council for the year 2021, Vesti reports.