Serbia, The Government forwarded the Law on the Budget for 2023

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The Government of Serbia forwarded the Law on the Budget for 2023 to the Parliament for adoption, according to which the deficit will be reduced from 3.9 percent of GDP in 2022 to 3.3 percent of GDP in 2023.

However, that deficit will be larger than planned in the original budget for this year, which was supposed to amount to three percent of GDP.

It is planned that the public debt will be reduced to 56.1 percent of GDP next year.

Budget expenditures will amount to 1,964 billion dinars and will be higher than the revenues planned at 1.84 billion dinars.

The budget deficit will amount to 121.3 billion dinars or slightly more than one billion euros. However, the state also plans to give 117.2 billion dinars (slightly less than one billion euros) for the item “expenses for the acquisition of financial assets”, which according to the explanation refers to “intervention funds for overcoming the energy crisis”.

Translated, it is about funds to cover the import of electricity and gas.

With that, the fiscal deficit jumps to 264 billion dinars or about 2.2 billion euros.

This will be financed by borrowing a total of 1,246 billion dinars or 10.5 billion euros.

Of this, 5.5 billion euros will be used to repay overdue debts and the rest of 2.8 billion euros should remain in the state’s account.

According to the next year’s budget, salaries in the public sector will be increased by 12.5 percent, except for salaries in the army, which will be increased by 25 percent.

The state has maintained the policy of large grants for capital projects, and 427.2 billion dinars or 3.6 billion euros will be allocated from the budget for them.

Half of these investments will be financed from the account of the Ministry of Construction, Transport and Investments (MGSI).

Within this ministry, projects worth around 200 billion dinars will be implemented. In the following year, it should increase to 214 billion, and in 2025 it would be halved to 108.4 billion dinars.

Among these projects, the largest next year will be the railway between Serbia and Hungary, for which 25 billion dinars have been allocated, and twice as much for the Moravian Corridor – as much as 50 billion dinars.

In total, 113 billion dinars or 950 million euros are planned for this highway in the next three years.

Next year, 19.4 billion dinars are planned for the section of Corridor 11 from Preljina to Požega, 13.35 billion dinars for the Ruma-Šabac-Loznica expressway, and 13.3 billion dinars for local sewage infrastructure and landfills.

The list also includes the bypass around Belgrade, the Požarevac-Golubac road, the removal of the German fleet from the Danube, and others.

But there is no National Stadium construction project among them. Together with the access roads, the stadium was transferred to the Ministry of Finance.

According to the plan of capital projects for the stadium, seven billion dinars (about 60 million euros) will be allocated in the next three years, or a total of about 180 million euros.

As of this year, there is also a Ministry for Public Investments, and about 20 billion dinars of investments will be realized through it.

These funds will be distributed to the construction of projects in health, education, sports and culture.

Energy projects will most likely be implemented through public companies, EPS and Srbijagas, and the state will provide guarantees for loans.

The budget approved the issuance of guarantees of up to 2.3 billion euros.

The largest guarantee foreseen in the budget is for the construction of the reversible hydroelectric power plant Bistrica – 600 million euros. A guarantee of 110 million euros is planned for the revitalization of hydropower plants in Bistrica and Vlasina.

A guarantee of 213 million euros was potentially approved for the revitalization of HPP Đerdap 2, and 250 million euros for the construction project of HPP Buk Bijela on the Drina.

There is also a project to replace the ash and slag transport system in TENT A, for which guarantees of 125 million euros can be issued.

Serbia also approved project and program loans from international financial institutions of 795 million dollars and 31 billion euros, mainly for infrastructure projects, but these are mostly projects that have been transferred from budget to budget for years, while some are already covered elsewhere in the budget.

Among them is one billion euros for RHE Đerdap 3, 1.5 billion euros for the highway Požega – Boljare, one billion euros for the metro and one billion euros for the construction of wind farms up to one gigawatt.

Next year, the state plans to increase subsidies for attracting investments from this year’s 17 to 23 billion dinars.

18.7 billion dinars are planned for subsidies to Serbian Roads and Corridors.

EPS will receive subsidies of 416.5 million dinars for the heat pipe to TENT A, 9.6 billion dinars for machinery for coal mining, while the Ministry of Energy will allocate 15.4 billion dinars for subsidies to public companies.

For JP PEU Resavica, 4.8 billion dinars will be spent, and for the energy-endangered customer, the issuance will be increased from 1.5 billion to four billion dinars.

At the same time, half as much money is planned for tourist vouchers, instead of 1.1 billion dinars, half a billion dinars have been allocated.

The Ministry of Defense will receive significantly more funds for investments. For buildings and equipment, the Ministry of Defense will receive 60 billion dinars, 27 percent more than this year.

The budget for the next year was prepared under the assumption that GDP will grow by 2.5 percent next year, but also that inflation will be 11.1 percent.

The biggest contribution to growth should come from personal consumption, which will grow by 2.5 percent, while government consumption will have a slightly negative contribution of -0.3 percent.

Due to the very low base this year, agriculture is projected to grow by 6.9 percent, and construction is also expected to grow due to the low base this year, Danas writes.