IMF on coronavirus crisis in Serbia: Limit the rise in SALARIES and PENSIONS

The mission of the International Monetary Fund (IMF) has estimated that the real GDP for Serbia will decrease by three percent in 2020, stating that the authorities quickly implemented a well-designed package of measures in order to mitigate the consequences of the pandemic. The IMF mission expects that growth will accelerate to six percent in 2021, but points out that space should be made for increasing public investment, and, taking into account budget risks, the growth in pensions and salaries in the public sector in 2021 should be limited. „Ad hoc pension increases and one-off payments should be avoided,“ the IMF mission said. Public debt, which was declining before the pandemic, is expected to increase in 2020, but it will remain below 60 percent of GDP and continue to move in a declining trajectory in 2021, the statement adds. The fiscal package, which includes increased health spending, tax deferrals, wage subsidies, universal cash transfers, and state guarantees for bank loans to SMEs, is one of the biggest among European countries in transition, the IMF says in a statement after an online meeting with the representatives of the Serbian authorities from 24 June 24 to 3 July. According to their estimates, and taking into account the projected economic recovery and the temporary nature of fiscal measures, it should be possible to reduce the fiscal deficit to about two percent of GDP next year.

Izvor: Danas, FoNet

Foto: Pixabay