According to the profession, economic growth in excess of four percent needs to accelerate public sector reforms. They say the growth is realistic as foreign investments are increased and the budget is regulated. At the beginning but also at the end, the main items of the standard are salaries and pensions. First, salaries. The average for September was 53,698 dinars, which is eight percent more than at the beginning of the year. From 2020, public sector wages will be increased by another eight to 15 percent.
The question is how much this growth will be accompanied by wages in the private sector. President Vucic thinks average wages in January could be up to 515 euros. The next item is pensions. The average is 26,342 dinars and some changes are planned for next year – an increase of 5.4 percent and a calculation according to the Swiss formula according to which any new increase will be in line with the growth of wages and inflation.
– As for retirement, the newly adopted formula is very good. It provides for a realistic increase in retirement standards, and is in line with the state of the budget. We expect something similar for salaries. For several years now, we have the situation that wages are rising faster than the country’s economic capabilities. In the next year, the task is for the Government to reverse these unfavorable circumstances and to ensure that wage growth in the public sector is in line with economic opportunities – said Vladimir Vuckovic, a member of the Fiscal Council.
Credit institutions that have increased Serbia’s investment and business ratings have twice confirmed that the Serbian economy has opportunities for growth, and the IMF has given Serbia positive ratings for implementing the agreed arrangement.
– All this was based on the budget execution in an agreed manner, the surplus was kept, the level of public debt in GDP was reduced – said Lazar Sestovic, the World Bank’s Chief Economist in Serbia.
The number of unemployed has also decreased, for the first time it is single-digit – 9.4 percent. This was influenced by the inflow of foreign direct investment, which amounted to 3.2 billion euros in the first ten months, an increase of 35 percent compared to the same period last year. And when this is underlined, there is economic growth. Last year, it was 4.4 percent, for this estimate growth is between three and a half and four percent, and the same for next year.
– In terms of economic growth, good results were achieved, but no preconditions were created to accelerate this growth in the coming years, which should bring about faster growth of people’s standards. Stronger and more intensive public sector reform is needed, from administration reform to pay grade reform in the public sector – said Vuckovic.
The answer to the question how to increase more than four percent was given recently by the World Bank. And in short, it would be: Not one but several minor reforms are needed at a time.
– We believe that reforms in the financial sector and the tax system are paramount. It should be started immediately in order to enable as little inflow of capital as possible, as much private investment as possible – Sestovic said.
While salaries and pensions are being calculated, highways are also being made, this year 130 new miles. The entire Corridor 10 to the border with Macedonia and Bulgaria was completed, the part of “Milos the Great” from Belgrade to Cacak was completed, and the “Moravian Corridor” was started.
Investment in infrastructure is one of the key items in the budget for the coming year.
