Serbia’s newly-appointed finance minister aims to curb public debt quickly

Serbia’s newly-appointed finance minister aims to curb public debt quickly
PM Ana Brnabic with newly-appointed Finance Minister Sinisa Mali. / Serbian government
By Iulian Ernst in Bucharest May 30, 2018

Serbia’s parliament endorsed with a comfortable majority of 154 votes out of 194 MPs former Belgrade mayor (2014-2018) Sinisa Mali, an economist with broad experience in the private sector, as the new finance minister, a government statement said. 

The appointment opens the door for a new programme already pinpointed by the Serbian government with the International Monetary Fund (IMF).

Serbian Prime Minister Ana Brnabic praised Mali for his work as Belgrade mayor, highlighting the improvements that the country's public finances need as well. 

Mali’s time as Belgrade mayor was overshadowed by the controversial midnight demolitions of old buildings to make way for the multi-billion dollar Belgrade Waterfront development that sparked the Don't Drown Belgrade mass protests. However, Brnabic pointed out that during his four-year mandate he managed to halve the debt of the capital, reduce by four times the budget deficit and consolidate public utility companies, and that Belgrade received its first credit rating. 

Mali told Radio Television Serbia that it is primarily important for him that the share of public debt in GDP next year will be below 50%. Serbia’s general government public debt stood at RSD2,808.17bn (€23.72bn) or 59.1% of GDP at end-March, data from the ministry of finance’s public debt administration showed. 

After Serbia was hit by the global economic crisis, its public debt ballooned from 28% of GDP in 2008 to over 70% at end-2014. Even though Serbia’s public debt fell in 2017 to 61.5% from a quite high ratio of 72.9% of GDP at the end of 2016, delayed restructuring of state-owned enterprises remains a risk.

Mali also said that it is necessary to provide money to invest in infrastructure, new factories, new jobs and to reduce unemployment. He added said that it is necessary to increase salaries and pensions this year and that "the responsible fiscal policy that the Serbian government has led in the past period gives place for such an increase."

An  IMF staff team reached agreement on key policy elements of its new programme with Serbia during an 11-day visit to Belgrade recently, but officials said they intend to return shortly to finalise the discussions once Serbia’s new minister of finance has taken office, reads the IMF’s statement.

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