Government adopts Bill on 2006 budget

Serbian Minister of Finance Mladjan Dinkic said that late today the government adopted the Bill on the budget of the Republic of Serbia for 2006.

Speaking at a press conference held after the government session, Dinkic said that the planned budget revenues for 2006 are 487.9 billion dinars and expenditures 448.3 billion dinars, which means that Serbia will have budget surplus for the second year in a row, amounting to 39.6 billion dinars in 2006.

He explained that this budget envisages, first and foremost, a long-term reduction of public spending by 1.3 percent of GDP. That will be achieved mainly by rationalisation of expenditures in the health insurance fund, reduction of subsidies to poorly performing domestic companies and diminishing the salaries fund of state bodies.

According to Dinkic, the budget surplus will be used for the repayment of domestic and foreign debts, and substantial funds will be set aside for special government programmes, such as housing loans, export loans, micro loans for unemployed persons, loans for boosting regional development and for the Fund for Young Talents.

He added that the new budget envisages an increase in public investments worth 0.3 percent of GDP, which will be directed towards several segments of the Ministry of Culture, Ministry of Religion, and Ministry of Education and Sport.

Speaking of the macroeconomic hypotheses according to which the budget is planned, Dinkic said that a 5 percent growth of the GDP is envisaged for the upcoming year, while the rate of inflation should be 9.3 percent.

Dinkic said that the Bill on the budget for 2006 is in complete accordance with the Mission of the International Monetary Fund, adding that it will go through regular parliamentary procedure, which means that the adoption of the Bill can be expected to take place in the second half of November.