2008 Budget Bill adopted

Minister of Finance Mirko Cvetkovic informed that the 2008 Budget Bill was adopted unanimously at the extraordinary session of the Government on November 12. He underscored that the Bill was derived from macroeconomic policy objectives for 2008, which include macroeconomic stability, dynamic economic growth, employment increase and improved living standards, accelerated process of EU stabilization and association, stepping-up of economic reforms and a more balanced regional development.

Minister of Finance

Mirko Cvetkovic informed that the 2008 Budget Bill was adopted unanimously at

the extraordinary session of the Government on November 12. He underscored that

the Bill was derived from macroeconomic policy objectives for 2008, which include

macroeconomic stability, dynamic economic growth, employment increase and improved

living standards, accelerated process of EU stabilization and association,

stepping-up of economic reforms and a more balanced regional development.

Projected total revenues in the Budget Bill amount to 639.6 billion dinars, 93.2%

of which are tax revenues. VAT share in the latter amounts to 48.7%. Planned

expenditure totals 654.44 billion dinars, where the main item is current

expenditure (89.9%, or 588,606 billion dinars). Capital expenditures account

for 10.1% and will be partly financed from loans.

The Minister informed that projected revenues and expenditure will be 9.9% higher

than in 2007, while the planned budget deficit will stay at the 2007 level, despite

the fact that revenues in the past year also included the license fee for

mobile telephony, which amounted to 1% of GDP. Projected expenditure includes

additional 30 billion dinars for transfers, 3 billion dinars for servicing of budget

arrears, 14 billion dinars for additional projects and 46 billion for

realization of projects in the National Investment Plan.

Containing salaries at the current level in real terms during 2008 will be the

key measure to reduce the share of public expenditure in GDP, Minister Cvetkovic

stated. He went on to say that this ratio is planned to be reduced by 0.8

percentage points, while the share of budget expenditure will decrease by 0.7 percentage

points. The Minister announced repayment of debts in the amount of 48.36

billion dinars and further tax system reforms, with the objective of

simplifying the system and creating more favorable conditions for savings and

investments.