Without fiscal consolidation, the region could enter a dangerous spiral of negative growth, growing debt and unemployment, so its importance is crucial for establishing conditions for growth and stability, it was said yesterday at the summit of finance ministers and central bank governors.
Opening the summit, which was organized in Miločer by the Belgrade weekly NIN, the Minister of Finance of Montenegro, Milorad Katnić, emphasized that, in addition to fiscal consolidation, it is necessary to strengthen stability and growth by accelerating structural reforms and building quality infrastructure, especially that which connects the countries of the region, one with second and wider in Europe.
"We continue to implement fiscal consolidation, which means lower government spending, a lower deficit and lower exposure to the unstable international financial market," said Katnić.
"Montenegro will continue the policy of integration and openness. This year we became a member of the WTO, started negotiations with the EU and meet the requirements for membership in NATO.
We continue to implement fiscal consolidation, which means lower government spending, lower deficit and lower exposure to the unstable international financial market.
Consumption is reduced below 40 percent of GDP, the deficit is around three percent, and the public debt of the Eurozone will be in recession this year as well.
Our region, the six countries of the Western Balkans, is also in recession in the first half of this year, while annual growth of no more than 0,3 percent is expected.
As a result of more difficult economic conditions than expected, most states in the region had to revise their fiscal plans and make additional consolidation," Katnić pointed out.
According to him, the fiscal stimulus that many recommended at the beginning of the crisis as a necessary and desirable instrument has become part of the problem and not the solution.
"Most countries in the region have exhausted fiscal reserves, and increased public debts are undermining macroeconomic stability.
At the same time, we must not forget that new lending will significantly affect the overall economic stability and development. The countries of the region can do much more on mutual economic integration, especially in the field of infrastructure.
Mutual trade in the region is very significant, but the still weak infrastructural connection of our countries makes that trade both smaller in volume and weaker in efficiency than it could be.
It is in the interest of the state and common prosperity to be as open as possible to each other and to the world, because connectivity increases the chances of development", emphasized the Montenegrin minister.
Senić: The worst financial result since 2000.
State Secretary of the Ministry of Finance and Economy of Serbia, Vlajko Senić, assessed that during 2012, Serbia faced the biggest challenges in the field of public finances after the democratic changes that took place in October 2000.
"The budget deficit has reached a record level of seven percent of GDP, and the year-on-year growth in consumer prices is greater than 10 percent.
"The budget deficit has reached a record level of 7% of GDP, and the year-on-year growth in consumer prices is greater than 10%. Total financing needs have reached the amount of 4,5 billion euros," said Senić.
The total financing needs reached the amount of 4,5 billion euros.
After the elections, the Government of Serbia prepared an extensive package of fiscal consolidation measures.
Overall, expenditures will increase by four percent in 2013, and revenues by 15 percent.
The government will ensure a drastic reduction of the budget deficit from this year's seven percent to 3,5 percent in 2013. The deficit will reach seven percent of GDP, which is the worst financial result since 2000.
The plan and budget submitted to the Government for adoption imply drastic fiscal consolidation and a deficit that could amount to 3,52 percent next year.
Such a move represents a serious step in the direction of savings and changes in behavior in general in the field of public finances," emphasized Senić.
Avdiu: The goal is a sustainable level of public debt
The Deputy Minister of Finance and Economy of Kosovo, Ramadan Avdiu, pointed out that it is of crucial importance to maintain fiscal sustainability and to provide sustainable financing and an adequate level of fiscal reserves with the budget.
"The goal is a sustainable level of public debt so that the measures do not jeopardize our future development.
"From 2008 to 2011, real GDP growth averaged 3,9% and was mainly driven by domestic demand and investments. We expect GDP growth this year by 3,9%, and next year by 4,5%," Avdiu said.
Kosovo's economy has remained largely protected from the global financial and current debt crisis, which is mainly the result of low financial integration, a small export base and very low public debt.
From 2008 to 2011, real GDP growth averaged 3,9 percent and was mainly fueled by domestic demand and investments.
This year we expect GDP to grow by 3,9 percent, and next year by 4,5 percent," concluded Avdiu.
Gallery
Bonus video:
