Serbia’s budget overhaul brings deficit to 6.9% of GDP to mitigate effects of pandemic
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BELGRADE, April 22 (Reuters) – The Serbian parliament adjusted the budget on Thursday, bringing the deficit to 381.7 billion dinars ($ 3.91 billion) or 6.9% of economic output, from 3% previously forecast, to mitigate the effects of the pandemic coronavirus disease and finance growth.
The overhaul of the 2021 budget adopted by the 250-seat assembly fixes revenues at 1,356.2 billion dinars and revenues at 1,768.4 billion dinars.
“No less than 7.2% of GDP, … will be allocated to capital investments” this year, mainly in infrastructure and energy, said Finance Minister Sinisa Mali before the vote in parliament, which is almost entirely dominated by the allies of President Aleksandar Vucic.
Serbia, a candidate for EU membership, has already launched a € 2.5 billion package to mitigate the economic impact of the coronavirus.
Belgrade plans to finance the higher deficit through borrowing, which would bring the country’s debt to around 60% of gross domestic product (GDP), from 58.2% currently, Mali said.
In January, Serbia tapped international markets with a 12-year Eurobond of € 1 billion with a yield of 1.92% and an annual coupon of 1.65%.
The International Monetary Fund expects Serbia’s economy to grow by around 5% this year, following a contraction of 1.1 in 2020. The Serbian government expects growth of around 6% in GDP this year.
($ 1 = 97.6900 Serbian dinars)
(Reporting by Aleksandar Vasovic; Editing by Peter Graff, William Maclean)
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