Monday, June 10, 2013

Govt to agree on deficit measures immediately

6/10/2013 3:55:00 PM

BELGRADE - National Bank of Serbia (NBS) Governor Jorgovanka Tabakovic said Monday that the government should come out with a package of measures for reducing the budget deficit as soon as possible, and the measures must not be those that are easiest to implement. Tabakovic told reporters at the Serbian Chamber of Commerce that the easiest thing to do is lower salaries, but this decreases buying power and does not encourage production. She said she believes the government intends to carry out badly needed structural reforms, because this determines the stability of the environment in which the people and companies will live and do business. "There is not a single person left who thinks there is time for demagoguery or second thoughts, the government must be prepared for difficult measures," said the governor. Tabakovic said there are many channels which unnecessarily drain money from the budget, but the government has already shown determination to deal with this. She said serious measures are needed and should start from the state administration which needs to make spending cuts and use money more efficiently, adding that there is room for savings in subsidies and the restructuring process which has to be completed eventually. -------- 

Negative opinions cause weakening of dinar 
 National Bank of Serbia (NBS) Governor Jorgovanka Tabakovic said Monday that negative opinions from the International Monetary Fund (IMF) and the Fiscal Council regarding the state budget have caused the dinar to drop against the euro in recent days by influencing investors to back out. Tabakovic told reporters at the Serbian Chamber of Commerce that "fluctuation in the dinar exchange rate and a three percent drop are a result of the IMF's not-at-all optimistic prognosis about the budget deficit." She also criticized the Fiscal Council for mentioning the possibility of a state bankruptcy in the media, saying it is not true that the state will go bankrupt. "I appeal to everyone to understand that moderate statements and harmonized views are needed in order for the capital to stick around," said the NBS governor. Tabakovic added that the future rate of the dinar will depend on the government's success in stabilizing the environment for foreign capital and direct investments in Serbia. Photo Tanjug, Z. Zestic

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