Fiscal Council: Goals of Strategy of Government of Serbia for 2021 Well Chosen, Poorly Planned

The Fiscal Strategy of the Government of Serbia for 2021, with a projection for 2022 and 2023, envisages good goals of fiscal policy in the medium term, which, however, are not planned credibly enough, the Fiscal Council has announced.

– The growth of the gross domestic product (GDP) would be driven by investments of the private sector, which are expected to grow over 9% annually over the next three years in real terms, but the strategy does not define well enough the concrete policies that would ensure this – the Fiscal Council said, assessing the strategy.

They add that the key measures of the government that would lead to the expected strong growth of private investments of 10% annually and the consequently relatively high GDP growth of 6% in 2021 are not presented clearly.

They point out that it is not known how the growth of the salaries in the public sector will be limited in the medium term when the state is not executing such policy even during the health crisis.

– A solid enough plan of a thorough restructuring of the most important state and public companies has not been presented, which is necessary for the projected reduction of subsidies – the Fiscal Council estimated.

The prognosis of the economic growth, according to the estimate of the Fiscal Council, is too optimistic, because the government projects a relatively high economic growth of 6% in 2021 and then 4% in 2022 and 2023.

– In the times of increased uncertainty, the government was supposed to be more cautious with the projections, and what’s especially questionable is the GDP growth of 6% in 2021, which is above the expectations of all credible international institutions – the Fiscal Council said.

Fiskalni savet Republike Srbije

Vlada Republike Srbije

Fiscal Strategy of the Government of Serbia

fiscal policy

growth of the gross domestic product

GDP