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BELGRADE, May 28 (Reuters) - Serbia’s prime minister said on Thursday the country’s fiscal deficit is expected to fall in 2015 as revenues improve and spending declines.
Serbia’s 1.2 billion euro ($1.3 billion) standby loan agreement with the International Monetary Fund requires it to trim the deficit and national debt and offload unprofitable and indebted state companies.
Prime Minister Aleksandar Vucic said spending was likely to be lower than expected at the end of May at around 8 billion dinars ($72.50 million), less than the 19 billion dinars agreed with the IMF.
“We are hoping fiscal deficit (in 2015) could be around 3 percent of gross domestic product,” Vucic told a news conference after meeting Gerd Mueler, Germany’s minister for economic cooperation and development.
Vucic also said Serbia’s economy has recovered and that it would need to borrow only for “what requires big money” such as investments.
“No more easy borrowing,” he said, adding: “We no longer need it, we have our own money and we will finance everything from the budget.”
The 2015 spending plan agreed with the IMF set the general government budget at 4.75 percent of GDP, but the consolidated budget, which includes spending of local authorities and some state enterprises, was planned at 6 percent.
In its three-year deal with the Fund, Serbia pledged to save 1.3 billion euros by 2017 and Vucic’s government has already cut some pensions and public sector wages and improved collection of taxes and excise duties.
But sales of loss-making state enterprises have been slower then anticipated and on Wednesday Serbia’s parliament amended the privatisation law, giving the government five more months to offload 17 companies employing around 21,000 people.
$1 = 110.3500 Serbian dinars Reporting by Aleksandar Vasovic; Editing by Catherine Evans