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International Information Centre for Balkan Studies



Serbian Finance Ministry says public debt higher

August 4, 2020

The Serbian Finance Ministry said on Tuesday that the public debt at the end of June stood at 26.827 billion Euro or 57.3 percent of the GDP, adding that this is 0.1 percentage point higher than at the end of May when the public debt stood at 57.2 percent of the GDP or 26.790 billion Euro.

The public debt stood at 23.944 billion Euro or 52 percent of the GDP at the end of December last year.  

The ministry said that the budget deficit stood at 304.8 billion Dinars (1 Euro – 118 Dinars) in the first half of 2020.  

A statement on the ministry web site said that budget income stood at 579.1 billion Dinars and that expenses stood at 883.9 billion. It said that the deficit stood at 68.3 billion Dinars in June. “The income in June stood at 123.3 billion Dinars, including 103.9 billion in taxes. Most of the taxes were VAT which accounted for 44.8 billion Dinar along with duties of 31.8 billion,” it said and added that non-tax income stood at 18.3 billion with a billion dinars in donations. Expenses in June stood at 191.6 billion Dinars.  

Preliminary data shows that the fiscal deficit in the first half of the year stood at 311.5 billion Dinars with a primary fiscal deficit of 248.3 billion.

Source:  http://rs.n1info.com/English/NEWS/a626353/Finance-Ministry-says-public-debt-higher.html

Serbian Fiscal Council chief economist predicts 6.5 percent drop in GDP

August 4, 2020

The chief economist of the Serbian Fiscal Council said on Tuesday that the country’s GDP dropped 6.5 percent in the second quarter of the year because of the coronavirus pandemic adding that state officials were interpreting economic data incorrectly, claiming that the situation was improving.

Chief Economist Danko Brcerevic said that the drop came as no surprise since the Fiscal Council predicted an even higher drop. “It’s no surprise that the drop in production in the second quarter is much lower than in most European Union member states,”he said and added that this is not because of any good economic policy but because Serbia is one of the poorest countries in Europe.

He warned that state officials were using economic data which was not released by the statistics office and interpreting them as they see fit. He said that the release of data before it is ready is a form of pressure on the statistics office to alter its data.

The chief economist warned that Serbia is likely to see a drop in the GDP by the end of year, contrary to what outgoing Prime Minister Ana Brnabic has been saying. “The Fiscal Council expects the situation to improve somewhat but not enough to overturn negative economic trends,” he said.

According to Brcerevic, the claims that unemployment continued to rise despite the health crisis are also wrong. The figures that show a drop in free-lance, unregistered and other informal employment are not available and the government has been pumping huge state aid into the economy to keep jobs, he said and warned that once the aid is no longer available a drop in employment figures will be a sure thing by the end of the year. “Increasing employment with the relatively deep drop in economic activity that Serbia is experiencing is impossible,” he said.

He said that the unions are exaggerating when they say that hundreds of thousands will lose their jobs. “It’s still impossible to make precise predictions on how many will lose their jobs but we expect a GDP drop of three percent to cause a moderate drop in employment figures of up to 1.5 percent which means that between 30,000 and 50,000 could lose their jobs,” he said.

Source:  http://rs.n1info.com/English/NEWS/a626397/Serbian-Fiscal-Council-chief-economist-predicts-6.5-percent-drop-in-GDP.html

Upper chamber takes final step in adopting 2020 budget

July 29, 2020

In a Wednesday emergency session, the House of Peoples adopted a report by a commission which was set up to harmonise two versions of the new budget passed by the two houses of Bosnia’s Parliament, which was the final step for passing Bosnia’s 2020 budget and enabling the country to hold its local election.

All 13 present members of the upper house voted for the report to be adopted.

The proposal, which was put together by the Presidency, was forwarded from the House of Representatives which adopted it two weeks ago.

The House of Peoples adopted it as well but with six amendments. The Parliament has then formed a joint commission composed of members from both chambers worked on harmonizing the text of the two budget proposals.

According to the budget, the total revenues, receipts and financing of Bosnia's institutions in 2020 amounts to 996 million Bosnian Marks, which is the same as the total expenditures. The 2020 budget is higher than the one of 2019 by 30 million Bosnian Marks, or three percent. External debt servicing amounts to 807,552,931 Bosnian Marks and is lower by 18.2 million Bosnian Marks compared to the previous year.

The budget also includes the funds for the local election - 4,227,000 Bosnian Marks.

Source:  http://ba.n1info.com/English/NEWS/a451542/Upper-chamber-takes-final-step-in-adopting-2020-budget.html

EU allocates € 12.5 billion for Western Balkans

July 21, 2020

The European Union will increase the amount planned for financing the candidate countries for almost ten percent in the next seven years, the bloc's leaders agreed on the pandemic recovery plan and seven-year budget after marathon talks on Tuesday, N1 reported.

The meeting during which 27 EU leaders agreed on the amount ended at 5 am, after almost five days of negotiations.

The Western Balkans countries will have access to those 12.5 billion Euro through the pre-accession funds.

"Those are not the only funds Serbia and the Western Balkans could count on. There are the European funds for sustainable development, as well as the EU Recovery Fund with ten billion Euro in grants available to the region," Marina Maksimovic, a Deutsche Welle correspondent from Brussels, said.

Earlier, Croatian Prime Minister Andrej Plenkovic tweeted about the meeting, writing his country, as an EU member state, would get "22 billion Euro as a guarantee of a quick economic recovery and further balanced development of the country."

Source:  http://rs.n1info.com/English/NEWS/a622078/EU-allocates-12.5-billion-for-Western-Balkans.html

Plinacro, BH-Gas confirm interest in developing gas transport systems

July 20, 2020

The gas transport system operators of Croatia and the Bosnian Federation entity, Plinacro and BH-Gas, have signed a new three-year memorandum of understanding and cooperation, Plinacro said on Monday.

The two operators began cooperating in 2006 and the goal of the new memorandum is to intensify joint activities in the preparation and realisation of three interconnection projects, according to a press release.

Their realisation ensures diversification of natural gas source and supply routes for Bosnia and Herzegovina, via the LNG terminal off Krk island in Croatia and the Ionian-Adriatic pipeline which will supply gas from the Caspian region, as well as an increase in natural gas transit through Croatia.

Source:  http://ba.n1info.com/English/NEWS/a449188/Plinacro-BH-Gas-confirm-interest-in-developing-gas-transport-systems.html

Serbia faces difficult autumn; living standards will plummet, economist says

July 21, 2020

If the current crisis caused by the coronavirus pandemic continues, many people in Serbia will lose jobs, especially in the automobile industry, and the living standard will substantially fall, Ljubodrag Savic, a professor at the Belgrade Faculty of Economics, tells N1.

He added that the three percent fall in GDP was a reality, and if the crisis went on, it could higher.

"A substantial number of people will lose their jobs. That will first happen in foreign companies. They have been a generator of economic growth in recent years, but now, many will possibly lose income," Savic said.

He also predicted that the living standard would plunge, adding that "no one expects some recovery will happen by the end of the year."

"Stocks are exhausted, and we are facing difficult economic autumn. Most of the population will live much worse than in the last several months," Savic said.

Direct foreign investments in Serbia dropped 26 percent in May compared to the same month last year, totaling 201 million Euro," Savic warned.

The Economic Institute data show that the state compensates that with capital investments - budget expenditures, but added that "foreign investments were up to Euro two-three billion, and it is unreal to expect we can keep the balance without additional borrowing," according to Savic.

He suggested the state could support the most endangered sector, but added the economy should be left to manage on its own and to wait for the next year.  

Source:  http://rs.n1info.com/English/NEWS/a622092/Serbia-faces-difficult-autumn-living-standards-will-plummet-economist-says.html

FDI 26 precent lower in May, Economics Institute associate says

July 21, 2020

Net foreign direct investments (FDI) in Serbia amounted to 201 million Euro in May or 26 percent less than in May 2019, Belgrade Economics Institute Senior Associate Ivan Nikolic told the Beta news agency on Tuesday.

Nikolic said that net FDI in the first five months of 2020 stood 1.253 billion Euro. “Those investments were 11.7 percent or 166 million Euro lower than in the same period of 2019,” he said adding that the drop was expected because of the coronavirus pandemic.

  He said that the good thing about the drop in investments is that the current account deficit is also lower by 4.5 percent compared to the previous year. “The current account deficit dropped primarily because o flower expenses for dividends and reinvestment of profits in Serbia,” he said.

Nikolic said the government was investing effort to compensate the drop in net FDI by increasing capital spending from the budget. “Capital expenses were 239 million higher in the first five months of this year and stood at more than five percent of the GDP,” he said.

Source:  http://rs.n1info.com/English/NEWS/a621924/FDI-26-precent-lower-in-May-Economics-Institute-associate-says.html

EBRD, EU allocate additional money to Western Balkans

July 10, 2020

The European Bank for Reconstruction and Development (EBRD) and the European Union will increase support of small and medium-sized companies, while the Bank will provide 70 million Euros in new loans for partner financing of local firms, the EBRD said in a statement carried by the FoNet news agency.

The EU will secure 15 million Euro for identification and verification of the best available equipment and technology for small and medium-sized companies to improve their competitiveness and switch to the green economy.

The money is meant for enterprises in Albania, Bosnia and Herzegovina, North Macedonia, Serbia and Kosovo.  

Source:  http://rs.n1info.com/English/NEWS/a618578/EBRD-EU-allocate-additional-money-to-Western-Balkans.html

Bosnian Presidency adopts state budget worth €498 million

June 26, 2020

Bosnia's tripartite Presidency adopted the state budget in the amount of 996 million marks (some €498 million) during Friday's Emergency session.

“The Presidency adopted the Draft budget for this year and submitted it to the parliamentary Assembly for emergency adoption,” Serb Presidency member Milorad Dodik said after the session. “the budget framework is the same but we changed its internal structure. We provided an additional 40 million marks (some €20 million) by cutting capital procurements by half and cutting travel expenses.”

These funds will be directed to mitigating the coronavirus consequences, he added.

“This proposal submitted and includes a section on international obligations. The obligations of the Republika Srpska (RS) entity are 270 million marks (some €135 million), which is less by 27 million marks. The Federation entity's obligations are 10 million (€5 million) marks higher last year's."

According to him, this budget will also fund the local election scheduled for November this year.

(€1 = 1.95 Bosnian marks)

Source:  http://ba.n1info.com/English/NEWS/a443480/Bosnian-Presidency-adopts-state-budget-worth-498-million.html

Economy professor: Despite economic crisis, Bosnia shows positive signs

June 25, 2020

Bosnia has been experiencing an economic decline for over three months economy professor Anto Domazet told N1 Thursday adding that according to the World Bank 30,000 to 80,000 people will lose their jobs in the country and that the GDP will drop by 5 percent.

“But we also have some worrying as well as optimistic signs. According to the Taxation Authority, 21,000 companies with some 143,000 employees applied for subsidies, but a month earlier the number of companies was 25,000 and the number of their employees was some 174,000,” Domazet noted.

“As far as unemployment is concerned, there are some pretty positive indicators there, as well, because the number of unemployed has dropped by some 25-26,000 and the number keeps dropping further. Obviously the measures taken by the government are bringing people back to work,” the professor said.

Speaking about Bosnia's industrial output which dropped by 15.9 percent in May this year compared to last year, Domazet said this is quite worrying because this number refers to the drop of exports which is expected to get better once foreign markets bounce back.

The professor also pointed out that it was always clear that the burden of the crisis would be carried by private business owners and in that sense, he noted that they acted pretty responsibly.

“The government assisted them only through contributions for the minimum wage. The subsidies helped mostly social institutions funded from the Federation (FBiH) entity budget," he commented.

Source: http://ba.n1info.com/English/NEWS/a443267/Economy-professor-Despite-economic-crisis-Bosnia-shows-positive-signs.html

Telekom Srbija highest bidder for Kosovo IPKO telecommunication operator

June 26, 2020

Serbia’s state Telekom company said it offered 155 million Euro, the highest price among ten other, for Kosovo’s IPKO telecommunication operator, media have reported.

Telekom said that due to confidentiality of information before the public call was over, it could not reveal any details. Kosovo’s RTK TV reported that local experts estimated it would jeopardise the national security if Telkom Srbija became the owner of IPKO.

Pristina’s Regulatory Body for Electronic and Postal Communications (RTEPK) decided in July that IPKO could not change the owner and sell shares to other company without RTEPK prior consent.

The decision came after Telekom Slovenia, the 100 percent owner of IPKO, announced last July the procedure of selling it.    

Source:  http://rs.n1info.com/English/NEWS/a613802/Telekom-Srbija-highest-bidder-for-Kosovo-IPKO-telecommunication-operator.html

Wages in Serbia rise, GDP falls

June 25, 2020

An average net wage in Serbia in April was 501.18 Euro, or eight percent nominally higher than at the same period last year, according to the Republic's Statistic Bureau (RSZ), the news agencies reported on Thursday.

The gross salary rose 8.2 percent nominally at the same time, while medium wage, 375.31 Euro, meaning that was the monthly amount half of the employees in Serbia received.

However, the GDP was estimated to drop three percent in 2020, due to the coronavirus epidemic, Milojko Arsic, an Economy Faculty professor, said.

He added that the economic Quarterly Magazine analysis presented on Thursday predicted that such a fall would cause the loss of dozens thousand jobs and an unemployment increase of 13 to 14 percent by the end of the year.

"Fiscal policy will also be heavily influenced by the crisis. We expect the fiscal deficit to be record high, between seven and eight percent of the GDP coupled with the public debt rise to some 28 billion Euro at the end of 2020," Arsic said.

He added that meant the public debt would rise from 52 to 60 percent of the GDP.

The analysis also predicts the drop in foreign direct investments which won't be enough to cover the deficit the current account balance of payments, nor will they contribute to economic growth as it has been the case before.

Arsic said that at the starts of the crisis, Serbia had smaller GDP fall compared to other European countries due to the less vulnerable local economy, and not because of "superior economic policy."

Serbia's economy is mostly based on the production of food, home chemicals and construction, which for the demand has not substantially fallen.

"Serbia's recovery will mostly depend on the improvement of the European Union member states' economies since their recover will enable higher export and possibly more investments.  

Source:  http://rs.n1info.com/English/NEWS/a613558/Wages-in-Serbia-rise-GDP-falls.html        

Small enterprises to get 2.5 million Euro from EU

June 18, 2020

The Belgrade-based EU Info Center said on Thursday that micro and small enterprises in Serbia will get 2.5 million Euro in grants as part of the EU PRO program.

A total of 112 micro and small enterprises in southeastern and southwestern Serbia will benefit from the European Union program and will use the money to buy equipment to upgrade their production and open new jobs. The money will be allocated to enterprises that applied in the autumn of 2019. 

The money is intended to help improve the competitiveness of those enterprises, helping them develop new products, open new jobs and set up new companies, a press release said.

The EU PRO program is intended to help achieve a more balanced social and economic development across the country with a total of 25 million Euro.

Source:  http://rs.n1info.com/English/NEWS/a611431/Small-enterprises-to-get-2.5-million-Euro-from-EU.html

Serbian government applies for aid from EU Solidarity Fund

June 18, 2020

The Serbian government decided to apply for financial aid from the European Union Solidarity Fund, a press release said on Thursday.

It said that the government decided to empower its working group to submit the application which it drafted. The draft application included an explanation of the course of the crisis caused by the coronavirus pandemic and the measures implemented to prevent its spread.

“The EU will decide on the amount of the grant to Serbia after the June 24 deadline for applications and a financial agreement will be signed to receive the funds by the end of the year,” the press release said.

Source:  http://rs.n1info.com/English/NEWS/a611363/Serbian-government-applies-for-aid-from-EU-Solidarity-Fund.html

ENEMO election observer mission in Serbia

June 16, 2020

The European Network of Election Monitoring Organizations (ENEMO) said on Tuesday that it had deployed a mission to Serbia for the June 21 parliamentary elections.

A press release said that the ENEMO International Election Observation Mission has accredited 6 international experts, members of the Core Team, to observe the vote, adding that this is the 30th ENEMO mission in all and the first observation mission in Serbia.

“ENEMO observers will meet with relevant interlocutors, stakeholders, civil society and media representatives for a more comprehensive overview of the electoral process. The ENEMO mission will not carry out systematic observation of the opening, voting and counting proceedings on the election day. However, ENEMO experts will visit a number of polling stations,” it added.

The observer mission will present its preliminary findings the day after the elections, the press release said, adding that a final report will be released at a later date.

“The ENEMO report and conclusions will be based on evidence and experts’ findings from the field, where they focus on the work of election administration bodies, registration of candidates, campaign, election-related complaints and appeals and other election-related activities,” it said.    

  ENEMO is an international network of 23 leading non-profit, non-partisan and non-governmental organizations from 18 countries of Central and Eastern Europe and Central Asia, including three European Union countries.

Source:  http://rs.n1info.com/English/NEWS/a610560/ENEMO-election-observer-mission-in-Serbia.html

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