Fiscal Council: Deficit down to 3.5 percent of GDP in 2015

Serbia's Fiscal Council has noted that the budget deficit could stand at 3.5 percent of GDP, adding that the real deficit would total around 4.5 percent of GDP at the end of the year

Favorable fiscal trends in the first half of the year suggest that this year's deficit will certainly be below the planned RSD 232 billion, or 5.9 percent of GDP, and will probably be at 3.5 percent of GDP, reads the latest report of the Fiscal Council.

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However, this very good fiscal result is only partial improvement when compared to the entire plan.

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A better revenue collection thanks to the reduction of the grey economy and introduction of electricity excises as of August will help curb the deficit by more than one percentage point of GDP.

“That is why our estimate is that the real deficit this year, with which the country would enter 2016, would stand at 4.5 percent of GDP, which is a major drop of 2 percentage points in comparison to the previous year,” notes the report.

The Fiscal Council described as temporary the additional savings of around one percentage point of GDP, which would formally trim the deficit to around 3.5 percent of GDP, as they come from delays in spending for public investments and severance pays.

(Telegraf.co.uk/ Tanjug)