Photo: Zoran Mrđa / Fonet
While the Minister of Finance announces an average salary of 1.400 euros, economist Milan Kovačević tells "Vreme" that not everything is so positive in the Serbian economy, as Siniša Mali represents
The Government of Serbia will discuss the budget rebalancing. Minister of Finance Siniša Mali said that this is a positive rebalancing, since recorded revenues are higher by 133 billion dinars and that with the rebalancing proposal, that money will be allocated to agriculture, health, education, and the Serbian Army, writes RTS.
He pointed out that the goal is to increase the average salary to 2027 euros by 1.400, and the average pension and minimum wage to be 650 euros.
A 12 percent salary increase for educators
If the proposal is adopted at today's session of the Government, it will be presented to MPs on Monday.
Mali announced that starting January 1, salaries in the public sector will be increased by eight percent, except for educators and employees in preschool institutions, whose salaries will be increased by 12 percent.
"When it comes to rebalancing, a positive rebalancing, a good rebalancing, precisely because we have, believe it or not, 133 billion dinars more income than planned. "Our idea is to see how to divide these revenues or direct them to what is our priority at the moment", emphasized Mali.
As he added, the incomes are not accidental, and the Serbian economy in the first six months of this year recorded a growth of 4,3 percent, making it, as he stated, the second fastest growing economy in Europe.
Not everything is so wonderful.
Economist Milan Kovačević in an interview for "Vreme" emphasizes that it is common practice in Serbia for the authorities to present seemingly huge revenues, but that the reality is somewhat different.
"It has been our custom for years to plan much lower revenues than they should realistically amount to, so later the government brags about much higher revenues in the budget. What is important is that we don't know how much the expenses are and how they are changing," Kovačević explains.
Recently, as he says, two areas, namely healthcare and education, are in a very difficult position, and the question is exactly how much more they will get after the budget rebalancing.
16 percent more foreign investments
Speaking about foreign direct investments, Siniša Mali said that in the first eight months of 2024, 16 percent more foreign direct investments were recorded than in the same period last year, which was a record.
"And all this in conditions when the crisis is still going on. Now you also see this potential conflict in the Middle East, the conflict in Ukraine is still going on. Despite all that, when you have one Germany, which is slowly but surely going into recession, so the Serbian economy is doing well, we are pushing well and we want to continue in that way," Mali emphasized.
Kovačević, however, claims that foreign investments currently do not have any impact on the improvement of citizens' living standards.
"Foreign investments do not have any direct impact on our budget. They gradually provide some income, but they are not a budget item and do not affect the citizens", says Kovačević.
The state takes from some and gives to others
Mali also pointed out that the minimum wage will be increased by 13,7 percent, that is, from 404 to 457 euros, which equates the minimum wage with the minimum consumer basket.
"As far as pensions are concerned, we managed to find a solution to President Vučić's request, that is, an increase in pensions, so that our oldest fellow citizens know, we are going with an increase of 10,9 percent, so we continue with a double-digit increase in pensions year after year. "What is very important is that today the average pension is around 390 euros, with this increase we are going to 435 euros," Mali said.
When asked how realistic it is to fulfill these promises, Milan Kovačević says:
"A budget is essentially nothing more than a set of revenues and expenditures. As soon as one item increases, it only means that more is taken from some citizens and businesses, through various contributions and duties, and then the earnings and wages increase by that much. The fact that the state gives someone higher salaries and pensions is misleading," says our interlocutor.
The regular pension increase, he says, should not make older citizens overly happy, because pensions are mostly increased by the need to pay an ever-increasing amount of money into the Pension Fund.
Visit of IMF representatives
Representatives of the International Monetary Fund are coming to Serbia on October 3. Siniša Mali stated that the current arrangement with the IMF is ending, and that the topic of the meeting will be discussions on the new arrangement, new reforms and new structural goals.
"Therefore, we have fulfilled all the goals that we defined in the arrangement with the IMF. Their attitude is very clear that we are on the right path, which is good. It is the most important, the most eminent financial institution in the world. So, don't let some Siniša or Vučić say that we are good. That's what they say, which is very important," said Mali.
During the visit, representatives of the IMF will, without a doubt, give a positive assessment to our economy, Kovačević believes.
"The question is what will be the further arrangement with the International Monetary Fund, since we have been borrowing a lot lately. Until now, that role was mainly limited to assessing the situation and providing assistance to Serbia", he says.
He concludes that now it is still necessary for the authorities, together with financial experts, to think carefully about how Serbia will get so much money, which would cover the expenses related to all the announced projects and salary increases.
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