The price of electricity should have been increased, News
The share of public debt in GDP was 52.3 percent at the end of May, but in absolute terms it is 577 million euros higher since the beginning of the year.
The deficit in the state coffers of 71 billion dinars was created from January to May, the Ministry of Finance announced yesterday. In that period, the state had revenues of 655 billion dinars, and expenditures of 726 billion.
The deficit in public finances is slowing down, because for the sake of comparison, for the four months from January to April, it amounted to 77.7 billion dinars.
At the end of May, the state owed 30.709 billion euros, so the share of public debt in gross domestic product (GDP) was 52.3 percent. Data from the Ministry of Finance show that the state borrowed 577 million euros in five months, because at the end of 2021 it owed 30.132 billion euros.
Milojko Arsić, a professor at the Faculty of Economics in Belgrade, says that in the second quarter the deficit slowed down, but only temporarily. It was high in the first quarter due to one-time payments such as those for pensioners and young people, and the highest growth in public spending is always in the fourth quarter.
Let us remind you that the officials said that the state will strive to ensure that the deficit in public finances does not exceed four percent of GDP. The deficit in the state coffers in the budget for this year is planned at three percent of GDP or about 1.5 billion euros. Arsić states that it is possible that the deficit will remain at that level.
– The fact that there is still no increase in salaries and pensions reduces the deficit. Inflation brings higher revenues to the budget, and half of the expenses, that is salaries and pensions, does not change. As long as salaries and pensions are not increased, real savings are made. “Pensions have fallen by several percent, but salaries in the public sector have not, they are at zero, but they will also lose their real value in a few months,” he notes.
According to him, the public debt is growing not yet in percentages, but in absolute amounts, which is also evidenced by the data on the increase in debt by 577 million euros.
– What further increased the public debt were the guarantees to “Srbijagas” and EPS of 250 million euros. By the end of May, those two companies from the field of energy took out loans worth more than 900 million euros. The loss of “Srbijagas” is also an issue, because it still sells gas at a lower price than the purchase price. He sells it at $270 per ton, and buys it at the current market price of $1,800. There is no gas payment to the Russians if the state does not add money – says Arsić.
It is similar with EPS. He has more reserves, he is trying to save money, he is late in paying suppliers. It is bad that the construction of the reversible hydropower plant “Bistrica” did not start as planned. Probably there are no funds for it, because it is needed for current operations such as importing electricity and coal. The price of electricity should have been increased even if there were no problems in EPS, Arsić believes. In that case, the price increase would be used for the construction of new power stations such as “Bistrica” and the modernization of existing capacities in thermal power plants, as well as for EPS to become a significant producer of clean energy, to build wind generators, solar power plants and the like, as all large energy companies in the world. Instead of development, funds are used to cover business errors and losses.
The Ministry of Finance announced yesterday that revenues in the amount of 145.3 billion dinars were collected in May, of which tax revenues amounted to 127.8 billion. The largest part of tax revenues refers to the payment of VAT in the amount of 69 billion dinars and excise duty in the amount of 27.7 billion. Non-tax revenues were realized in the amount of 16.8 billion dinars, and the inflow of donations in May was 0.7 billion.
Expenditures were made in the amount of 138.6 billion dinars. Expenditures for employees in May amounted to 30 billion, transfers to OOSO (PIO Fund, RFZO, NES, SOVO Fund) 16.8 billion, while other current expenditures were 17.5 billion, given that the fiscal was paid from this category stimulus to young people.
At the level of the general government, in the period January-May, a fiscal deficit of RSD 58.8 billion and a primary fiscal surplus of RSD 11.1 billion were realized, Politika writes.