The increased revenues in the state coffers should have been used by the rebalancing of the budget of Serbia for 2023 to reduce the fiscal deficit and the state debt, and to increase pensions and to determine which wages should increase by analysis.
Fefa faculty professor Goran Radosavljević estimated that it is necessary to conduct a more responsible fiscal policy and use the increased budget revenues to reduce the fiscal deficit and state debt, as well as to correct some salaries.
“The way the rebalancing was proposed, it was expected because of the announced elections. Money continues to be thrown ‘from a helicopter’, the government is hooked on it as if it were a gamble and the spiral of money distribution continues, and in the end it is a risk for both the citizens and the government, Radosavljević said.
Due to the budget rebalancing, due to higher revenues of EUR 516 million, a slight reduction of the deficit compared to the original budget is foreseen, from 3.3 percent to 2.8 percent of the gross domestic product (GDP), but new expenditure measures, salary increases are foreseen and pension, distribution of EUR 85 to children up to 16 years of age, higher expenses for interest on the public debt of EUR 44 million, and the biggest increase is for subsidies to agriculture.
Radosavljević assessed that it was necessary to determine why revenues from value added tax (VAT) fell, as claimed by the Fiscal Council, and to increase, if possible, its collection, instead of extraordinarily increasing the excise tax in order to fill the budget, thereby fueling inflation.
“We should have ‘skipped’ the decision on an extraordinary increase in excise duty and curbed unrealistic investments, such as football stadiums, the relocation of the Belgrade fair and the construction of roads that we don’t know if and how profitable they are,” said Radosavljević.
He stated that the main problem is that feasibility studies are not done, so it is not known how profitable certain projects will be. “There has never been a feasibility study on a project, but one man goes out in public and says what he has decided to build, and that it is not within his jurisdiction, and we are not talking about knowledge,” said Radosavljević.
Inflation, he said, devalued the wages of some workers, and it was necessary to make an analysis of who was affected by the drop in standards, and only then see which wages should be corrected.
“A much bigger problem is the large number of employees on the minimum wage who are most affected by the increase in prices,” said Radosavljević.
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