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Serbia to spend €2.5 billion to aid recovery from coronavirus crisis

EURACTIV.com with Reuters

2 minutes

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Serbia plans to spend about €2.5 billion in loans and subsidies to businesses and payments to pensioners and other citizens to help them cope with the economic impact of the coronavirus, President Aleksandar Vučić said on Tuesday (26 January).

The package envisions an array of measures including payments amounting to 50% of the minimum wage to employees of micro and small enterprises and state guarantees for borrowing in commercial banks.

"We want to tremendously … bolster the private sector," Vučić told state-run RTS TV.

The state also plans to distribute €30 to every adult Serbian citizen or about 5 million people in May and November, and an additional €50 to every pensioner, Vučić said.

"There will be three (such) gifts for pensioners, and two for all adult citizens," Vučić said.

Vučić said the total public debt this year would not exceed 61% of gross domestic product (GDP).

Serbia's 2021 budget sees economic growth at 6%, following an estimated contraction of around 1% in 2020. It also sets the 2021 deficit at 3%. The International Monetary Fund sees Serbia's economy growing by 5% in 2021, after a forecast 1.5% contraction last year.

Last March, Serbia allocated €5.5 billion to help businesses and citizen cope with the crisis. Additional expenditures increased the deficit in 2020 to around 8.9%, up from the previously planned 0.3%.

In Serbia, which has a population of 7 million, 3,924 people have died from COVID-19 and 387,206 fell ill with it. The country, which has started a nationwide inoculation programme, registered a new strain of the coronavirus last week.