BELGRADE, April 28 (Reuters) - With deputies protected by transparent panels, the Serbian parliament on Tuesday began to debate a budget recast to compensate for economic damage caused by the coronavirus pandemic.
The recast, adopted by the government last week, envisions an increase of deficit to 7% from a previously planned 0.3% and it would be mainly covered by borrowing at home and abroad.
The parliament which was disbanded in March ahead of elections in April, must reconvene to confirm government decrees adopted during the state of emergency imposed due to coronavirus pandemic. The elections are also postponed until later in the year.
An array of restrictive measures introduced by Serbia last month to curb the spread of the coronavirus virtually halted most small-businesses and reduced outputs of major companies.
As the rate of infections stabilised, the government began to ease restrictions in April, allowing small businesses to open and reducing the overnight curfew. So far 8,275 people in Serbia fell ill with the coronavirus and 162 died from it.
To speed up recovery, Belgrade introduced a 5.1 billion-euro ($5.6 billion) support programme last month for small businesses and a one-off payment of 100 euros to every citizen older than 18.
Serbia’s Fiscal Council, a government-appointed advisory body, said that some measures were adequate but the 100 euros payment would lead “to additional and costly borrowing”.
“The biggest and irredeemable error ... is the payment of 100 euros... (which) would not have tangible and sustainable effects on the acceleration of the economy,” it said in a statement.
The ruling coalition led by the Progressive Party of President Aleksandar Vucic has an overwhelming majority in the 250-seat parliament, which is boycotted by most opposition parties and the vote is seen as a formality.
Opposition accuses Vucic and his allies of autocracy, violence against opponents, stifling of media freedoms and corruption. Vucic and his allies deny such accusations.
The International Monetary Fund, the World Bank and Serbia’s finance ministry expect Serbia’s economy to miss its 4% growth target for 2020 and go into a recession, then rebound in 2021. (Reporting by Aleksandar Vasovic; Editing by Angus MacSwan)