Serbian parliament adopts 2016 budget, sets deficit at three percent of GDP

Serbia's parliament adopted a 2016 budget on Saturday, setting the deficit at 121.8 billion dinars ($1.09 billion) or 3 percent of national output down from the planned 191.3 billion in 2015. Out of 250 deputies, 173 voted for the budget that sees revenue at 997.43 billion dinars and expenditure at 1,085 billion. The budget will be sent to the International Monetary Fund Executive Board which is due to vote on a third review of a 1.2 billion euro loan deal with Serbia on Friday.
It envisages gross domestic product (GDP) growth of 1.8 percent and inflation of 2.8 percent in 2016. The government plans to borrow 662.3 billion dinars in 2016 - 90 billion in bilateral loans, 450 billion in government T-bills and bonds and up to 122.5 billion in Eurobonds. The Fiscal Council, Serbia's top economic advisory body warned in a report earlier this week that unless the government reforms or closes down loss making state-companies including copper miner RTB Bor, the deficit could be higher than planned.