January 2016 Monthly Update Politics Serbian Prime Minister Aleksandar Vucic gave firm assurances to the delegates he met at the World Economic Forum's Annual Meeting in Davos that Serbia would stay the reform course, regardless of early general elections. Austrian Foreign and Integration Minister Sebastian Kurz will visit Serbia in the second week of February. Serbian Prime Minister Aleksandar Vucic will take part in an international conference on the Syria crisis in London. Serbia’s Minister without portfolio for EU integration, Ms. Jadranka Joksimovic, said that Serbia can expect to open rule of law chapters 23 and 24 in the first half of 2016. She also said that Chapter 5, dealing with public procurement, and Chapter 20, on enterprise and industrial policy, could be opened by the end of 2016. Serbia has made substantial progress in judicial reform and in improving its justice system, Council of Europe (CoE) Director General of Human Rights and Rule of Law Philippe Boillat said. Fiscal Sector In December 2015, public debt of the Republic of Serbia changed from RSD 2,994.1bn (EUR 24.7bn) at the end of November 2015, to RSD 3,017.5bn (EUR 24.8bn) at the end of December 2015. Central Government public debt to GDP (ESA 2010 methodology) ratio was at the level of 75.5% at the end of December 2015. The major share of public debt is still in foreign currency out of which in EUR is 39.8%, USD 32.9%, RSD 22.2%, SDR 3.9%, CHF 0.6% and other 0.6% (GBP, JPY, DKK, SEC, NOK). Up to the end of December 2015, Public Debt Administration of the Republic of Serbia managed to meet its obligations which amounted to RSD 626.0bn (EUR 5.1bn), out of which principal payments amounted to RSD 501.3bn (EUR 4.2bn), while interest and other costs were RSD 125.0bn (EUR 1.0bn). Vast majority of items repaid up to the end of December 2015, belong to government securities issued on domestic market RSD 427,3bn (EUR 3.5bn) out of which principal payments were RSD 364.9bn 1 (EUR 3.0bn) and interest payments were RSD 62.5bn 2 (EUR 514mln). Obligations in respect of foreign creditors were repaid in amount of RSD 96.6bn (EUR 794mln), out of which principal RSD 42.2bn (EUR 347mln). Payments in respect of guarantees issued by the Government were RSD 45.9bn (EUR 377mln) out of which principal RSD 38.8bn (EUR 319mln), while interest were RSD 7.1bn (EUR 59mln). In 2015, PDA received RSD 492.3bn (EUR 4.05bn) from domestic market out of which government securities issued in domestic currency amounted to RSD 362.0bn (EUR 2.98bn) while receiving from EUR denominated government securities was RSD 130.2bn (EUR 1.07bn). Total receiving in 2015, amounted to RSD 514.3bn (EUR 4.23bn). Serbia posted a general government deficit of RSD 148.6 billion (3.7% of GDP) in 2015. The outcome is below RSD 162.1 billion (4.1% of GDP), agreed with the IMF after successful completion of 3 rd review. Main factors that influenced budget deficit were better macro framework, fight against shadow economy and tax evasion. In January 2016, the budget surplus amounted to RSD 33.0 billion. The revenues that amounted RSD 72.9 billion, came from VAT collection (RSD 36.6 billion) and excise tax (RSD 27.7 billion). Excise duties on tobacco were major driver of better collection of excise taxes. The Government also collected RSD 12.7 billion from issuing license for 4G network. Economy Serbian Prime Minister Aleksandar Vucic attended a ceremony marking the completion of the first stage of the construction of the future Belgrade Center main railway station at Prokop. Japanese multinational electronics, electrical equipment and IT Corporation Toshiba and Serbian state postal company Posta Srbije signed a memorandum of understanding (MoU) to develop joint projects on third markets, mainly targeting Russia and Iraq. The European Investment Fund, part of the European Investment Bank group, and Germany’s ProCredit group, including ProCredit Bank in Serbia, have signed an agreement to increase lending to innovative small and medium-sized enterprises (SMEs) as well as small mid-caps under InnovFin – EU finance for innovators, an initiative supported by the European Commission. Serbia and South Korea have signed an agreement to remove double income taxation of the two countries’ resident individuals and businesses. The European Bank for Reconstruction and Development’s (EBRD) representatives said that the lender is satisfied with its cooperation with the Serbian government, and that it is ready to take an active role in and support the development of Belgrade’s international airport. Foreign Direct Investments Italian footwear manufacturer Geox opened a factory in the south Serbian town of Vranje. The plant was opened under an investment of EUR 15.8 million and intends to hire some 1,200 people at the factory. Swedish company Ikea should open its first stores in Belgrade by the end of the year, Serbian Prime Minister Aleksandar Vucic said after meeting with his Swedish counterpart Stefan Lofven in Davos on Thursday. IGB Automotive Comp signed agreements to buy a piece of land in the Vojvodina town of Indjija, adjacent to its existing plant there, in order to build a new facility under a EUR 4.5 million investment and create 500 jobs. 1 Repayments based on Frozen Foreign Currency Bonds are not included in this amount 2 The difference between nominal value and discounted value is included in this amount
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January 2016
Monthly Update
Politics Serbian Prime Minister Aleksandar Vucic gave firm assurances to the delegates he met at the World Economic Forum's Annual
Meeting in Davos that Serbia would stay the reform course, regardless of early general elections.
Austrian Foreign and Integration Minister Sebastian Kurz will visit Serbia in the second week of February.
Serbian Prime Minister Aleksandar Vucic will take part in an international conference on the Syria crisis in London.
Serbia’s Minister without portfolio for EU integration, Ms. Jadranka Joksimovic, said that Serbia can expect to open rule of law
chapters 23 and 24 in the first half of 2016. She also said that Chapter 5, dealing with public procurement, and Chapter 20, on
enterprise and industrial policy, could be opened by the end of 2016.
Serbia has made substantial progress in judicial reform and in improving its justice system, Council of Europe (CoE) Director General
of Human Rights and Rule of Law Philippe Boillat said.
Fiscal Sector
In December 2015, public debt of the Republic of Serbia changed from RSD 2,994.1bn (EUR 24.7bn) at the end of November 2015,
to RSD 3,017.5bn (EUR 24.8bn) at the end of December 2015. Central Government public debt to GDP (ESA 2010 methodology)
ratio was at the level of 75.5% at the end of December 2015. The major share of public debt is still in foreign currency out of which in
EUR is 39.8%, USD 32.9%, RSD 22.2%, SDR 3.9%, CHF 0.6% and other 0.6% (GBP, JPY, DKK, SEC, NOK). Up to the end of
December 2015, Public Debt Administration of the Republic of Serbia managed to meet its obligations which amounted to RSD
626.0bn (EUR 5.1bn), out of which principal payments amounted to RSD 501.3bn (EUR 4.2bn), while interest and other costs were
RSD 125.0bn (EUR 1.0bn). Vast majority of items repaid up to the end of December 2015, belong to government securities issued on
domestic market RSD 427,3bn (EUR 3.5bn) out of which principal payments were RSD 364.9bn1 (EUR 3.0bn) and interest payments
were RSD 62.5bn2 (EUR 514mln). Obligations in respect of foreign creditors were repaid in amount of RSD 96.6bn (EUR 794mln),
out of which principal RSD 42.2bn (EUR 347mln). Payments in respect of guarantees issued by the Government were RSD 45.9bn
(EUR 377mln) out of which principal RSD 38.8bn (EUR 319mln), while interest were RSD 7.1bn (EUR 59mln). In 2015, PDA
received RSD 492.3bn (EUR 4.05bn) from domestic market out of which government securities issued in domestic currency
amounted to RSD 362.0bn (EUR 2.98bn) while receiving from EUR denominated government securities was RSD 130.2bn (EUR
1.07bn). Total receiving in 2015, amounted to RSD 514.3bn (EUR 4.23bn).
Serbia posted a general government deficit of RSD 148.6 billion (3.7% of GDP) in 2015. The outcome is below RSD 162.1 billion
(4.1% of GDP), agreed with the IMF after successful completion of 3rd review. Main factors that influenced budget deficit were better
macro framework, fight against shadow economy and tax evasion.
In January 2016, the budget surplus amounted to RSD 33.0 billion. The revenues that amounted RSD 72.9 billion, came from VAT
collection (RSD 36.6 billion) and excise tax (RSD 27.7 billion). Excise duties on tobacco were major driver of better collection of
excise taxes. The Government also collected RSD 12.7 billion from issuing license for 4G network.
Economy
Serbian Prime Minister Aleksandar Vucic attended a ceremony marking the completion of the first stage of the construction of the
future Belgrade Center main railway station at Prokop.
Japanese multinational electronics, electrical equipment and IT Corporation Toshiba and Serbian state postal company Posta Srbije
signed a memorandum of understanding (MoU) to develop joint projects on third markets, mainly targeting Russia and Iraq.
The European Investment Fund, part of the European Investment Bank group, and Germany’s ProCredit group, including ProCredit
Bank in Serbia, have signed an agreement to increase lending to innovative small and medium-sized enterprises (SMEs) as well as
small mid-caps under InnovFin – EU finance for innovators, an initiative supported by the European Commission.
Serbia and South Korea have signed an agreement to remove double income taxation of the two countries’ resident individuals and
businesses.
The European Bank for Reconstruction and Development’s (EBRD) representatives said that the lender is satisfied with its
cooperation with the Serbian government, and that it is ready to take an active role in and support the development of Belgrade’s
international airport.
Foreign Direct Investments
Italian footwear manufacturer Geox opened a factory in the south Serbian town of Vranje. The plant was opened under an investment
of EUR 15.8 million and intends to hire some 1,200 people at the factory.
Swedish company Ikea should open its first stores in Belgrade by the end of the year, Serbian Prime Minister Aleksandar Vucic said
after meeting with his Swedish counterpart Stefan Lofven in Davos on Thursday.
IGB Automotive Comp signed agreements to buy a piece of land in the Vojvodina town of Indjija, adjacent to its existing plant there,
in order to build a new facility under a EUR 4.5 million investment and create 500 jobs.
1 Repayments based on Frozen Foreign Currency Bonds are not included in this amount
2 The difference between nominal value and discounted value is included in this amount
January 2016
Source: Statistical Office of the Republic of Serbia; National Bank of Serbia; Bloomberg; Ministry of Finance and Economy * Estimated value; **According to NBS methodology Foreign Debt consist of Public and Private sector debt; *** According to methodological concept of IMF and EU “BPM6” applicable from April