In the next year’s budget of Serbia, there will be an additional amount of EUR 400 to 450 million, which should be used to increase public investments, primarily the construction of roads and railroads, and to reduce the payroll tax from 63 to 60 percent, Chairman of the Fiscal Council, Pavle Petrovic, said today.
Speaking about the economic trends this year and the recommendations for budget planning in 2019 in the National Bank of Serbia (NBS), he said that Serbia had been lagging in terms of development behind other Central and Eastern European countries (CEE) because of its long-standing low economic growth.
He added that insufficient economic growth was the main obstacle to faster increase in the standard of living of citizens.
“Even this year, when the relatively high growth of gross domestic product (GDP) will be achieved, and we estimate that it will reach 4.4%, the situation is not much better, because the accelerated growth is a result of the impact of extraordinary circumstances, among other things, the growth of agriculture compared to the poor and dry year of 2017,” Petrovic said.
He assessed that the economic trends, when these extraordinary factors are excluded, are considerably lower this year compared to the averages of the CEE countries with which Serbia is compared.
Next year, an additional amount of about 450 million euros in the budget, according to him, should be used by allocating about 200 million euros for reducing the payroll tax and total contributions from 63 percent to 60 percent.
The remaining amount in the state budget should, according to him, be used to increase public investments as Serbia lacks infrastructure, and the other reason is that they stimulate economic growth faster than all the other forms of public spending.