International Information Centre for Balkan Studies

Serbia’s Min: Infrastructural projects with DFC worth $ 3.7 billion

September 21, 2020

The US International Development Corporation (DFC) and Serbia will realise infrastructural projects worth 3.7 billion Dollars, Zorana Mihajlovic, Minister of Construction, Transport and Infrastructure, said on Tuesday.

The projects come as a result of the documents Belgrade and Pristina signed at the White House on September 4 within the ‘Economic Normalisation,’ programme initiated by the US President Donald Trump’s special envoy for the dialogue between the two capitals Richard Grenell and witnessed by the President.

Mihajlovic said the arrival of different capital and investors, like the DFC, was of an enormous significance for Serbia.

“We are situated in the centre of the region, and it is strategically vital to connect (with other countries). That is the policy of President (Aleksandar)Vucic and our government,” Mihajlovic said after Grenell and the DFC delegation arrived in Belgrade after talks they had in Pristina on Monday.

She said the opening of the DFC office in Belgrade was also politically important, and that Vucic’s visit to the US crucial for 130-year-long bilateral relations between Serbia and America.  

Source:  http://rs.n1info.com/English/NEWS/a652382/Serbia-s-Min-Infrastructural-projects-with-DFC-worth-3.7-billion.html

Serbia’s GDP at 1980 level

September 21, 2020

Serbia’s GDP is lower than it was in 1980 and the state is worse than it was under Socialism, a social forum organized by the Friedrich Ebert Foundation and the United Branch Unions Nezavinost was told.

The meeting heard that there is wide-spread poverty in the country and one of the highest inequality rates in Europe as well as problems on the labor market.

Nezavisnost leader Zoran Stojiljkovic said that the unions in Serbia have no reliable political partner which is why they have limited influence. He called for a new social contract as a platform which would rally people and deal with the most important issues such as the climate, environment and economics.

The meeting was also told that the inequality rate in Serbia is 36 while Slovenia and Slovakia have inequality rates 10 points lower.

Source:  http://rs.n1info.com/English/NEWS/a652243/Serbia-s-GDP-at-1980-level.html

Contract signed with Russian railway company

September 21, 2020

The Serbian Construction, Traffic and Infrastructure Ministry on Monday reported the signing of a contract between the Serbian and Russian railways to reconstruct part of the Belgrade-Bar railway.

A press release said that the contract was signed by the CEOs of the Serbian Railways Infrastructure company and Russian RZD International, Nebojsa Surlan and Sergey Stoliarov in the presence of Minister Zorana Mihajlovic and Russian Ambassador Alexander Botsan-Kharcenko. Under the contract, the two companies will draft plans to reconstruct the railway section between the town of Valjevo and the border with Montenegro.  

Mihajlovic is quoted as saying that Serbia is determined to invest in infrastructure, especially railways which are as important as roads for the country’s development. “We will also build fast railways between Belgrade and Nis and between Nis and Presevo and reconstruct regional railways,” the minister said. She added that the reconstruction of the Belgrade-Bar railway is difficult because it has 250 tunnels and more than 230 bridges.

Source:  http://rs.n1info.com/English/NEWS/a652219/Contract-signed-with-Russian-railway-company.html

Serbian public debt at 56.7 percent of GDP

September 4, 2020

The Serbian Finance Ministry said on Friday that the national public debt stood at 56.7 percent of the GDP at the end of July, totaling 26.579 billion Euro.

The total internal and foreign debt stood at 25.137 billion Euro with indirect debts at 1.442 billion, the ministry said.

The share of the public debt in the GDP at the end of July was 0/6 percent lower than at the end of June when it stood at 57.3 percent of the GDP or 26.870 billion Euro.

The public debt stood at 52 percent of the GDP at the end of December 2019 or 23.944 billion Euro, the ministry said.

Source:  http://rs.n1info.com/English/NEWS/a636355/Serbian-public-debt-at-56.7-percent-of-GDP.html

Serbia’s budget deficit higher than 300 billion in first seven months

September 4, 2020

The Serbian Finance Ministry said on Friday that the national budget deficit stood at 323.7 billion Dinars (1 Euro – 118 Dinars) in the first seven months of 2020.

A statement on the ministry web site said that budget income totalled 710.6 billion Dinars with expenses standing at 1,034.4 billion. 

The deficit stood at 19 billion Dinars in July with income totalling 131.5 billion, 117.3 billion of which was tax revenue. Most of the tax revenue was VAT, totalling 51.9 billion Dinars while duties brought in 36.6 billion. Non-tax income in July stood at 13.7 billion Dinars with another 0.5 billion in donations. Expenses in July totalled 150.5 billion Dinars including employee expenses of 25.5 billion and transfers to pension, health care, employment service and others standing at 28.8 billion Dinars. Subsidies stood at 37.3 billion Dinars including financial aid to the economy as part of the measures to ease the effects of the coronavirus pandemic.  

The overall fiscal deficit at state level in the January-July period totaled 330.4 billion Dinars and the primary fiscal deficit totaled 257.9 billion, the Finance Ministry said.

Source:  http://rs.n1info.com/English/NEWS/a636337/Serbia-s-budget-deficit-higher-than-300-billion-in-first-seven-months.html

Serbian Finance Ministry says credit rating stable according to Moody’s

September 3, 2020

The Serbian Finance Ministry said on Thursday that the Moody’s ratings agency kept the country’s credit rating at the level of Ba3 with positive prospects.

A press release quoted Moody’s as saying that it expects Serbia to achieve significant growth of six percent and a full economic recovery in 2021 despite risks.  

According to the Finance Ministry, the agency’s annual report which was published on Wednesday evening said that the positive prospects for a further rise in Serbia’s credit rating are even more significant bearing in mind the fact that this is a time of a great economic crisis, drop in the global economy and increased risk caused by the coronavirus pandemic. The Ministry said that the government’s successful monetary policy measures over the previous few years resulted in stable and low inflation.

Finance Minister Sinisa Mali said that it’s important for the public to know that the coronavirus pandemic did not cause a deterioration in Serbia’s public finances, adding that the Moody’s report which confirmed that the country maintained its credit ratings is the best confirmation of that claim.

 In a separate press release, Moody’s said that “Serbia has executed a strong fiscal consolidation drive which provides a degree of resilience to the expected deterioration in public finances in the context of the pandemic”. “The economy benefits from a generally more stable macroeconomic environment that will support robust growth potential after the coronavirus-induced recession,” it added.

“The credit profile of Serbia (Ba3 positive) is supported by its relatively high income compared to peers alongside a relatively large and diverse manufacturing sector which helps to attract sizeable foreign investment,” Moody's Investors Service said in the report.

It warned that “a challenging business environment arising from weaknesses in the rule of law and a still sizeable informal sector weighs on growth potential”. “Furthermore, the large, albeit gradually declining, share of foreign-currency government debt and the banking sector's high degree of euroisation also pose credit risks. Contingent liabilities from the state-owned enterprise sector still remain significant and the pace of reforms to contain these risks remains slow,” it added.

“The positive rating outlook reflects recent improvements to debt metrics and Serbia's robust medium-term growth outlook. Upward pressure on Serbia's rating could arise if Moody's concludes that, over the medium-term, the government's policy stance will continue to support a downward trend in government debt. Conversely, the outlook could be stabilised if Moody's concludes that Serbia's fiscal strength would be materially eroded over the medium-term, or from the emergence of a large and sustained current-account deficit which would be increasingly difficult to finance,” the report said.

Source:  http://rs.n1info.com/English/NEWS/a635968/Serbian-Finance-Ministry-says-credit-rating-stable-according-to-Moody-s.html

NBS: IMF confirms Serbia successfully implements its economic program

August 27, 2020

The International Monetary Fund (IMF) assessed that Serbia had continued with the successful implementation of the economic plan, supported by the Fund's Policy Coordination Instrument (PCI), the National Bank of Serbia (NBS) said in a statement on Thursday.

The IMF Executive Board's evaluation followed the successful completion of the fourth, penultimate review of the results of Serbia's economic program, the NBS statement said,

It also quoted the IMF as saying that in fighting the coronavirus pandemic, Serbia's authorities adopted strict protective measures at an early stage.

The NBS statement further said the IMF Board positively assessed Serbia's economic policymakers' response to the coronavirus pandemic.

It added it was robust, timely and comprehensive, saying the authorities responded to the pandemic quickly with a large package of fiscal and monetary measures, as well as measures aimed at the banking sector.

The NBS also quoted the IMF Board as saying that low inflation and a stable exchange rate had been preserved in Serbia.

According to the IMF, the NBS had pursued an adequate relaxing monetary policy and adopted temporary emergency measures to help preserve the liquidity of the banking sector and support lending activity.

The IMF board also said the fiscal package adopted in response to the crisis was one of the largest in the region, and that it provided the necessary support to households, businesses and the health system.

Source:  http://rs.n1info.com/English/NEWS/a633691/NBS-IMF-confirms-Serbia-successfully-implements-the-economic-program.html

RFE: EU granted €143 million to Serbia’s railway system in 11 years

August 26, 2020

In the last 11 years, the European Union has financed various projects in Serbia in the modernisation of the railway with more than 143 million Euros in grants, the EU Delegation to Serbia told Radio Free Europe (RFE) on Wednesday.

However, the Government and the respective ministry publically insist railroad projects with China and Russia, RFE added.

It says that Serbia carries out the modernisation of its railways with many loans from Beijing and Moscow.

The EU in Serbia took part in many railway’s projects in the country through its non-refundable funds,

 Serbia's 2020 budget envisaged 1.73 billion Euro loans from Russia, with the amount rising yearly.

However, the fact that the EU in Serbia took part in many railway’s projects in the country through its non-refundable funds remains almost unknown to the general public. 

Some of the funds worth exactly as those Serbia subsequently borrowed from China and Russia, RFE said.

The European Investment Bank, as an EU non-profit organisation, provides the most favourable loans to Serbia, without mandatory fees, without management fees or any other fees, the EU told RFE.      

Source:  http://rs.n1info.com/English/NEWS/a633289/RFE-EU-granted-143-million-to-Serbia-s-railroad-system-in-11-years.html

Serbia loses € 1bn due to lack of foreign tourists; export to Kosovo € 86 mil

August 13, 2020

Rasim Ljajic, Serbia's Trade Minister, said on Thursday his country would lose some billion Euro this year due to the coronavirus epidemic which caused the lack in foreign tourists' visits.

"The damage might be less because of good results recorded in January and February and partly in March," Ljajic told the state RTS TV, adding that domestic tourists would lessen the loss.

He said the increase in foreign tourists' visits was 28 percent in January and 18 percent in February compared to the same months in 2019, but the decrease in the following months was over 90 percent.

That, according to Ljajic, made some new destinations in Serbia drawing the attention of local people.

However, that would not be enough to compensate the less number of foreigners at the country's level, although the increase in the number of tourists at some places was higher than in Belgrade, usually the most popular destination, Ljajic said.

Commenting on Serbia's export to Kosovo, he said it reached 86 million Euro in April after Pristina suspended the 100 percent import taxes on goods from Serbia.

"Still, it is twice less than in 2018 before the taxes," Ljajic said adding it would take time to get back to Kosovo market supplied by other countries before April.  

Source:  http://rs.n1info.com/English/NEWS/a629230/Serbia-loses-billion-due-to-lack-of-foreign-tourists-export-to-Kosovo-86-mill-Min-says.html

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

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