Increase in the budget deficit - the Government reached an agreement on a new arrangement with the IMF

There has been an agreement on the revised budget for 2011 and a frame budget for 2012, provided that the budget deficit in 2011 amounts to 4.5 percent of GDP and in 2012 - four percent, Nikezić said at a press conference in the Serbian government.

The deal includes implementation of wage and pension increases in October and an increase in social benefits for some 3.8 billion, Nikezić said.

He stated that the total estimated revenues in the revised budget for 2011 will be smaller than 22 billion dinars planned .

The biggest increase in expenditure will be due to projected growth of wages and pensions worth 13.4 billion dinars, as well as the social benefits of 3.8 billion, said Nikezić.

'Arrangement with the IMF is very important for Serbia because it is a clear signal that the Government and National Bank of Serbia will lead responsible economic policy and will provide macroeconomic stability in the next 18 months,' Nikezić said, adding that he expects the arrangement to have a positive impact on economic activity as well as on increasing employment and standard of living.