Public Statement

As of July 2008, the Ministry of Finance has been reporting on execution of budget revenues and expenses in line with standard and internationally comparable methodology created by the International Monetary Fund (Government Finance Statistics – GFS, 1986). The main difference between the previous and the new methodology is that the former methodology overestimated budget revenues (by including the license for mobile telephony) and underestimated expenses (by failing to include loans and repayment of debt to pensioners). Therefore, the planned RSD14.8 billion budget deficit for this year (according to the former methodology) grew to RSD44.9 billion with application of the standard international methodology.

Simultaneously, for reasons of comparability, the Ministry of Finance has continued to report by following the former methodology, in line with which the 2008 Budget Law was adopted. According to the former methodology, the budget of the Republic of Serbia created RSD3.9 billion surplus in the first eight months of 2008, while the standard international methodology (GFS 1986) indicates that the budget posted RSD17.4 deficit.

As of July 2008, the Ministry of Finance has been reporting on execution of budget revenues and expenses in line with standard and internationally comparable methodology created by the International Monetary Fund (Government Finance Statistics – GFS, 1986). The main difference between the previous and the new methodology is that the former methodology overestimated budget revenues (by including the license for mobile telephony) and underestimated expenses (by failing to include loans and repayment of debt to pensioners). Therefore, the planned RSD14.8 billion budget deficit for this year (according to the former methodology) grew to RSD44.9 billion with application of the standard international methodology.

Simultaneously, for reasons of comparability, the Ministry of Finance has continued to report by following the former methodology, in line with which the 2008 Budget Law was adopted. According to the former methodology, the budget of the Republic of Serbia created RSD3.9 billion surplus in the first eight months of 2008, while the standard international methodology (GFS 1986) indicates that the budget posted RSD17.4 deficit.

The Ministry of Finance hereby denies the information published in some media that the position Social Assistance Benefits from the budget in January 2008 includes “the thirteenth salary, bonuses and prizes to civil servants”. The position Social Assistance Benefits from the budget in January 2008, beside regular items that amounted to RSD4.4 billion, included two extraordinary positions concerning social assistance benefits that were in no way related with salaries of civil servants. Namely, the two items were repayment of public debt related with pensions of retired farmers in the amount of RSD5.2 billion and the RSD2.7 billion loan for repayment of severance pays to former employees of Robne kuce Beograd. The funds from sale of Robne kuce Beograd have already been collected and it is expected that in the course of bankruptcy procedure for Robne kuce Beograd the loan amount will be repaid into the budget by the end of the year.

The Ministry of Finance will continue to regularly and comprehensively inform the public concerning both the situation of public finances in Serbia and the public finance reform. The standard international methodology will be used in preparation of the 2009 Budget Law.