“Unjustifiably High SALARY increase, payroll tax should have been reduced”
Serbia’s gross domestic product (GDP) growth will be around three percent in 2020, and due to the medium-term growth trend so far, the forecast by the Government of Serbia of four percent growth is not realistic, according to preliminary estimates of the Fiscal Council presented today. “The GDP growth expectation of three percent is based on the previous medium-term growth of the Serbian economy, which averages three to 3.5 percent annual growth, and during this year, there were no significant reforms in the economic environment that would have stimulated this growth next year, such as reducing corruption, the rule of law or increasing investments in the business sector,” Fiscal Council’s President Pavle Petrovic said at a news conference presenting strategic budget and fiscal policy recommendations for 2020. As Petrovic added, the growth forecast for the next year is also based on the growth indicators in the first half of this year, which did not show an acceleration trend that could have a positive impact on 2020 as well. That is why the Fiscal Council also forecasts that growth in 2019 will be just over three percent. He said that the additional funds of 45 billion dinars are projected to appear in the 2020 budget, and that RSD 20 billion of that amount should be used to reduce the payroll tax, which would stimulate the growth of the private sector, while the rest of the money should be invested in infrastructure, primarily utilities, as well as environmental protection, and not in public sector salary increase.