The PCI, it is stated, aims at supporting the recovery from the pandemic, maintaining macroeconomic stability, and anchoring the medium-term fiscal policy framework, while pushing ahead with structural reforms to deliver more inclusive and sustainable growth.
Driven by soaring global food and energy prices, inflation has increased to 10.4% in May 2022 while core inflation remained lower at 6.3%. Facing these obstacles, the authorities acted accordingly and preserved financial stability, helping companies navigate the international sanctions regime and supply chain disruptions and providing financing for energy imports.
Regarding the energy supply, the Government of the Republic of Serbia secured additional space for gas storage for the upcoming winter, reaching an agreement with the Hungarian Government by securing more than 500milion cubic meters of gas. Nevertheless, there is an urgent need for reforms in the energy sector.
Supported by strong revenue collection, the fiscal deficit target of 3% of GDP for 2022 remains appropriate and feasible. Regarding this, the Minister of Finance of the Republic of Serbia stated that in line with this year’s budget, the goal is to limit the fiscal deficit and prepare a new set of fiscal rules in consultation with the IMF, including a new fiscal debt rule and deficits, to ensure long-term fiscal sustainability.