Serbian parliament passes 2014 Budget Law

The Serbian parliament has enacted the 2014 budget law, which sets the budget deficit at RSD 182.5 billion or 4.6 percent of the planned gross domestic product (GDP), Tanjug news agency has reported.

On Friday evening, 134 members of the ruling coalition, the parliamentary club comprising the Serbian Renewal Movement, Christian Democratic Party of Serbia and independent MPs Vuk Jeremic and Dragana Djukovic voted in favor of the budget bill.

On the other hand, 40 opposition MPs were against the bill, while Vladimir Cvijan, a senior official of the Serbian Progressive Party (SNS) who announced that he would not back the budget earlier in the day, was not present when the voting took place.

The budget was adopted within the legal time-frame, and envisages revenues of RSD 930 billion, reflecting a nominal growth of 6.5 percent in comparison to the 2013 budget review, and expenditures of RSD 1,113 billion, which constitutes an increase of 5.8 percent.

In 2014, Serbia will achieve a slim economic growth of one percent, primarily due to insufficient expansion of investments and a real drop in the consumer and government spending, according to the projection of the budget.

The collection of VAT is expected to bring about the greatest revenues of RSD 430 billion, or 46 percent of total revenues, while when it comes to expenditures, funds earmarked for organizations of mandatory social insurance, primary the Pension and Disability Insurance (PIO) Fund, will amount to RSD 280 billion, or 25 percent of overall expenditures.

The capital expenditures will total RSD 52 billion , which is a considerable rise when compared to 2013, some of the most significant projects being the irrigation in agriculture, refurbishment of clinical centers, research and development in the field of science.

Funds allocated to employees will amount to RSD 272 billion, or 24 percent of total expenditures, which is a nominal increase of 3.2 percent on 2013, while expenditures for goods and services will amount to RSD 96 billion.

Interest payments will total RSD 114 billion, or RSD 20 billion more than in 2013, and subsidies will drop by RSD 3 billion and amount to RSD 81 billion.

The budget envisages funds for culture and the media of RSD 16.1 billion or more than two times bigger sum than in 2013.

Presenting the budget proposal to MPs, Serbian Prime Minister Ivica Dacic said that the budget is based on the objectives that the government proclaimed and the principle of responsibility in running the economy.

Finance Minister Lazar Krstic underscored that the 2014 budget bill is neither ideal, nor the best, but rather realistic and the only possible, given the circumstances.