Dušan Vujović, Minister of Finance: From Austerity to Shared Prosperity

At the end of the sixth review the IMF mission praised Serbia’s continued strong overall performance under the economic program, especially the robust fiscal performance driven by stronger than expected revenues.

After ten months the general government fiscal balance is in surplus, indicating that we are more than one billion Euros ahead of the originally projected deficit for this period.

For the whole year, the general government deficit is now officially projected at 2.1% including a seasonal spike in expenditures and the expected assumption of old public enterprise debts. You have just completed the sixth review under the IMF precautionary arrangement.

What remains to be done before the IMF Board scheduled for mid-December?

— The main pending task is the preparation and approval of the 2017 Budget in line with agreed parameters. We will continue with a gradual fiscal consolidation that will allow for a targeted public wage and pensions increase and ensure longer-term public debt sustainability. The fiscal deficit is expected to decline to 1.7% of GDP in 2017, while the pensions and public sector wages will continue to decline as shares of GDP, converging to more sustainable levels over the medium-term. Over the past two years we have already achieved 3.9% of the structural fiscal adjustment. We need to do one small step in 2017 to achieve the 4.0% structural fiscal target set under the three-year program. In short, we are gradually moving from austerity measures to sustainable expansion.

Whole interview is available at http://www.diplomacyandcommerce.rs/dusan-vujovic-minister-of-finance-from-austerity-to-shared-prosperity/