Serbia’s budget includes 40 billion RSD worth of guarantees for preservation of banking sector

- There are 40 billion RSD worth of guarantees for preservation of banking sector in the budget of Serbia – said Mirko Cvetković, the Prime Minister of Serbia.

- We expect the wave of pressures on the banks as the consequence of the economy’s impossibility to service its obligations. There will be bankruptcy proceedings where banks will not be able to collect their claims – Cvetković said at the Business Forum on Kopaonik mountain.

The Prime Minister announced adoption of the additional package of measures for the fight against negative effects of the global economic crisis, which should be put in effect within next month, and he added that those measures would be introduced to relax the economy.

According to his words, it is necessary for Serbia to have the budget deficit that is larger than projected and to reduce public consumption in 2009, which will also be the subject of the talks with the delegation of IMF.

Cvetković announced that the state would use the funds from foreign loans to cover the increased budget deficit, which was not going to cause the debtor’s crisis because Serbia was not in the class of the countries with large debts.

- When it comes to the coverage of the expected deficit, the debts should not be made within the country, and the deficit should be financed exclusively from foreign loans – said Cvetković.

At this moment, according to his words, the projected budget deficit of Serbia ranges between 1.75 and 1.8% of gross national product, but it is going to grow by 1 or more percents, while the projected economic growth of 3.5% "will be significantly lowered".

Prime Minister Cvetković pointed out that, in spite of the fact that economic indices were not encouraging, economists and citizens should not allow themselves to become pessimistic.

Cvetković also announced that the number of the members of the Government’s Economic Council would be increased from current 5 to 15 or even 20, which should enable timely reactions on the effects of the crisis.

Vlada Republike Srbije

Međunarodni monetarni fond-MMF Beograd

Socijalno-ekonomski savet Republike Srbije Beograd

Mirko Cvetković

Business forum Kopaonik 2009