The Memorandum on the Budget and Economic Fiscal Politics for 2009, with projections for 2010 and 2011, December 2008

Pursuant to Article 14, paragraph 1, item 1) of the Budget System Law (“Official Gazette of the Republic of Serbia” Nos. 9/02, 87/02, 61/05 – state law, 66/05, 101/05 – state law, 62/06 – state law and 85/06),

The Government hereby adopts the revised

MEMORANDUM
ON THE BUDGET AND ECONOMIC AND FISCAL POLICIES FOR THE
YEAR 2009, WITH PROJECTIONS FOR 2010 AND 2011

I. MACROECONOMIC FRAMEWORK FOR THE PERIOD 2009-2011

On 2 October 2008, the Government of Serbia adopted the revised Memorandum on the Budget and Economic and Fiscal Policies for the period 2009- 2011, in accordance with the Budget System Law. However, global economic landscape has suffered a huge downturn in the past month, with severe consequences for Serbian economy. The most recent estimates indicate that global economic growth in 2009 will be a modest 2.2%, while projections made only a month ago assumed a 3% growth rate. It is expected that the level of economic activity (GDP) will decline in developed economies (USA, EU, Japan), while developing economies, in particular Central and Eastern European countries, will experience a slowdown. In light of such rapidly changing global estimates, it was necessary to adjust the previously adopted economic projections and policies outlined in the Memorandum on the Budget to the new circumstances.

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The Memorandum on the Budget and Economic Fiscal Politics for 2009, with projections for 2010 and 2011, December 2008