VUJOVIC: Salary and pension raises depending on economic growth

Minister of Finance Dusan Vujovic stated on Saturday, December 10, that, in addition to the envisioned raising of salaries and pensions in early 2017, another raise might be discussed in 2017, if the economic growth and revenues exceeded those projected in the budget.

– This will depend on the dynamics of the realization of the GDP, which projects a growth of 3%, but that is a conservative projection. We have projected the biggest possible increase with these parameters. If the growth rate is bigger, if the conditions for creating new jobs are better, if there are better salary tax and contribution conditions, there will certainly be room for discussion about it as well – Vujovic said for RTS while answering the questions about potential additional salary and pension raises in 2017.

He stated that the Government had managed to have the IMF approve salary raises thanks to good results, which confirmed that we were on the right track, even though the deficit would increase by 0.4% or 0.5% due to that.

– We said earlier that salary raises of 6% in healthcare and of 5% in some other sectors were not usual in three-year programs with the IMF. The Fund is usually conservative in such matters and requires that the arrangement expires before the salaries and pensions are returned to the level they were at before the program – Vujovic stated.

Talking about next year’s budget risks, he said that they pertained to restructuring of enterprises, as well as public enterprise assets.

– We have been solving this for years and it has now come to the forefront. Budget projections are that this must be solved next year. As the expression goes, the budget was adopted at the eleventh hour regarding structural issues. We have envisioned certain expenditures pertaining to this, but we first need to realize what we’ve planned, but also stop new issues from arising in public enterprises – Vujovic emphasized.

He repeated that the election would not influence the budget.

– This is an election year and the budget includes expenditures for the two rounds of the upcoming election. If there are additional expenditures, there will always be room for action – the minister said and emphasized that the budget was quite flexible.

– This is why we’ve asked for the current budget reserves to be larger, so that we can react if necessary. Next year’s election won’t influence investors. They are looking at main indicators and we are very close to achieving the investment level and I believe that this will be realized – Vujovic emphasized.

He said that, after the approval of the sixth review, expected late next week, the IMF would switch to the regime in which the control would be carried out once each six months instead of being carried out quarterly.

Ministarstvo finansija Republike Srbije

Međunarodni monetarni fond - MMF Beograd

Ministry of Finance

Dusan Vujovic

budget of Serbia for 2017

2017 budget

salary and pension raises

economic growth of Serbia

International Monetary Fund

IMF

public enterprises

enterprises in restructuring

presidential election