Serbia’s parliament Wednesday approved a budget for 2011 foreseeing a deficit of around 4.1% of output as agreed earlier with the International Monetary Fund.

The budget is based on expected growth next year of 3.0% of gross domestic product, while inflation was foreseen within 3.0% and 6.0%.

Earlier Wednesday, the national statistics bureau said Serbia’s economy grew by 1.5% of GDP in 2010 while inflation came in at 11.5%, nearly double the forecast.

The unemployment rate rose to 19.2% of the active working population.

Serbia has been slowly recovering from the effects of the global financial crisis, and it currently has a public deficit of 4.8% of GDP.

The government is also grappling with a slide in the national currency, the dinar.

In May 2009 the IMF agreed to extend nearly EUR3 billion in loans to Serbia on condition that Belgrade cut its deficit, reduce public administration costs by 10% and freeze public sector wages and pensions until April.

Serbia has so far drawn EUR1.46 billion from the IMF.

Serbia’s economy grew by 1.5% of gross domestic product in 2010 and inflation came in at 11.5%, nearly double the forecast, the national statistics bureau said Wednesday.

The unemployment rate rose to 19.2% of the active working population.

Serbia’s economy has been slowly recovering from the effects of the global financial crisis, and it currently has a public deficit of 4.8% of GDP.

The government is also grappling with a slide in the national currency the dinar.

In May 2009 the International Monetary Fund agreed to extend the country nearly EUR3 billion in loans on condition that Belgrade cut its deficit, reduce public administration costs by 10 percent and freeze public sector wages and pensions until April 2011.

Serbia has so far drawn EUR1.46 billion from the IMF.

Serbian authorities foresee inflation of 4.5% in 2011 and 4.0% in 2012.

The Serbian government decided Wednesday to allow the free import of oil and oil products and liberalize their prices from January 2011, Beta news agency reported.

“This historic decision leads us towards a free market and free formation of prices which will mean a better quality of oil and oil derivatives for lower prices,” Beta quoted Serbian Energy Minister Petar Skundric as saying.

The decision will come into force Jan. 1, Skundric said.

The move effectively revokes the monopoly of Gazprom-owned oil company NIS on imports of oil.

Gazprom bought a 51% stake in NIS for EUR400 million in December 2008 as part of a wide-ranging accord between Russia and Serbia.

December 29, 2010
AFP

• A Permanent Economic Emergency