Serbia’s supplementary budget to be unveiled next week will achieve an extra 1 billion euros ($1.26 billion) benefit by raising taxes and cutting spending, the government said.
About half the saving will come from austerity measures and the rest from “minimal tax increases,” Prime Minister Ivica Dacic said, according to a statement on the government web site.
“We must avoid a budget blockade, to make sure that there is enough money for pensions and wages,” as well as debt servicing “in order to avoid falling into a debt crisis,” Dacic said.
The draft budget will be presented to parliament on Sept. 10 to be followed by laws that include lifting 130 levies and other fees that burden businesses as the authorities aim to spur economic growth, according to the prime minister.
“Short term, it is important that Serbia survives and to ensure fiscal consolidation, because the budget gap in the first six months is 7 percent” of gross domestic product, while the public debt may near 60 percent of GDP by the end of the year, Dacic said.
Serbia’s own fiscal rules require that the public debt must not exceed 45 percent of GDP.