No increase in salaries in public sector until country comes out of recession

The Deputy Prime Minister and Minister of Economy and Regional Development, Mlađan Dinkić, estimated yesterday (December 18, 2010) that if the salaries in public sector were increased before Serbia came out of the recession, the economy of our country would be destroyed, and he repeated that such thing was not going to happen - it is stated on the website of the Government of Serbia.

Dinkić, who was present at the opening ceremony of the annual International Hotel and Restaurant Association Congress, expressed expectation that the Dinar exchange rate would remain stable by the end of the year and pointed out that the foreign currency reserves of NBS were at historical level of 10.5 billion EUR, and that Dinar had already started to grow.

He pointed out that Dinar had dropped by only 4% since February 2009, while inflation had been between 6.6 and 7%, and he warned that the requests of the Electric Power Company of Serbia (EPS) and other public companies for increase in salaries represented much bigger danger to the growth of inflation.

According to his words, those companies that register profit may be able to pay the bonus before the Easter, but there will be no general increase in salaries until Serbia comes out of the recession.

Dinkić pointed out that the Government and NBS were not to be blamed for what happened in the foreign currency market because the demand was larger than supply, which was always the case in December and January since the entrepreneurs were buying foreign currencies to pay for the goods from abroad and to repay the debts from the previous year.

According to his words, last year's public consumption was within the limits agreed with the International Monetary Fund and the budget rebalance, and there were no excessive payments from the budget.

Also, Dinkić pointed out that it should be determined why Serbia was not withdrawing the World Bank's loans because those favorable loans were granted to the poorest countries with the repayment period of 20 years, grace period of 10 years and the annual interest rate of less than 1%.