The Memorandum on the Budget and Economic Fiscal Politics for 2010, with projections for 2011 and 2012, June 2009

On the basis of Article 14, par. 1, item 1) of the Budget System Law (“Official Gazette of the Republic of Serbia”, no. 9/02, 87/02, 61/05- the Law, 66/05, 101/05- the Law, 62/06-the Law and 85/06),
The Government adopts

THE MEMORANDUM
ON THE BUDGET AND ECONOMIC FISCAL POLICY FOR 2010,
WITH PROJECTIONS FOR 2011 AND 2012

INTRODUCTION

Macroeconomic framework. Macroeconomic trends in 2008 record the real GDP growth of 5.4% and single-digit inflation rate of 6.8% p.a. According to the labor survey, the labor market showed positive tendencies of the decline in the unemployment rate to 14.4% and slowing down the real growth of average net wages at the rate of 3.9%.

In 2008 all economic activities recorded positive growth rates, as follows: agricultural production – 8.5%, industrial production – 1.1%, civil engineering – 3.4%, transportation – 0.4%, telecommunications and PTT – 41.3%, trade – 5.9% and tourism – 0.1%. Positive growth rates of export of goods of 15.5% and imports of 15.3% were achieved, along with the growth in foreign trade deficit, amounting to EUR 8.2 billion and import export coverage of 47.7%. Balance of payments registered current account deficit of -17.8% of GDP as a result of the growing foreign trade deficit and lack of compensation surplus in balance of service and factor income. Net inflow of foreign direct investment was EUR 1.8 billion, whereas foreign exchange reserves amounted to EUR 8.2 billion.

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The Memorandum on the Budget and Economic Fiscal Politics for 2010, with projections for 2011 and 2012, June 2009