Article metrics

  • citations in SCindeks: [3]
  • citations in CrossRef:[2]
  • citations in Google Scholar:[=>]
  • visits in previous 30 days:11
  • full-text downloads in 30 days:10
article: 7 from 48  
Back back to result list
Ekonomika preduzeća
2017, vol. 65, iss. 1-2, pp. 43-67
article language: English
document type: Review Paper
published on: 21/05/2017
doi: 10.5937/ekopre1702043P
Fiscal consolidation and growth in Serbia, 2015-2017: Program, accomplishments and drivers
aUniversity of Belgrade, Faculty of Economy, Department of Statistics and Mathematics + Fiscal Council of the Republic of Serbia, Belgrade
bFiscal Council of the Republic of Serbia

Abstract

Despite the encouraging progress in economic and fiscal trends in 2015 and 2016, Serbia is still far from high economic growth and healthy public finances. In this paper, we provide an in-depth analysis of the drivers of the economic recovery and the fiscal deficit decrease in the previous two years. In both cases, the analyses have shown that the observed improvements rest, to a large extent, on short-term and unplanned factors that are easily exhausted. Economic activity was under a significant impact of external growth drivers - a strong drop in oil and food prices, decreased interest rates and faster recovery of the region and the Eurozone. This is why practically all countries in the region, and not just Serbia, exceeded GDP forecasts by about 1 p.p. in 2015 and 2016. The fiscal deficit was decreased primarily through a surprisingly high public revenue collection, while for the most part, the planned savings were not achieved. Fiscal risks, particularly those pertaining to poor business performances of public and state-owned enterprises, practically remain the same in 2017 as they were in 2014. All this indicates that the improved economic and fiscal trends leave no room for complacency, but should be observed as a rare opportunity to implement structural reforms in a somewhat more favourable environment without a direct pressure of an impending crisis. If this opportunity is missed now, the reforms will have to be implemented in a far less favourable environment and will thus be far more difficult.

Keywords

References

Alberto, A., Carlo, F., Francesco, G. (2012) The output effect of fiscal consolidations. NBER Working Paper, 18336
Alesina, A., Ardagna, S. (2013) The Design of Fiscal Adjustments. Tax Policy and the Economy, 27(1): 19-68
Blanchard, O., Leigh, D. (2013) Growth Forecast Errors and Fiscal Multipliers. IMF Working Papers, 13(1): 1
EU Commission (2016) European economic forecast - Winter 2016. European Economy, 1, 2016
EU Commission (2015) European economic forecast, Winter 2015. European Economy, 1, 2015
EU Commission (2016) European economic forecast - Autumn 2016. European Economy, 3, 2016
Fiscal Council of the Republic of Serbia (2016) Evaluation of fiscal trends and structural reforms in 2016
Fiscal Council of the Republic of Serbia (2014) An overview of successful fiscal consolidation programmes in Europe: Measures, effects and lessons
Fiscal Council of the Republic of Serbia (2016) Assessment of the Law on Budget of the Republic of Serbia for 2017 and Fiscal Strategy for 2017-2019
IMF (2016) Central, Eastern and Southeastern Europe: Effective Government for stronger growth. Regional Economic Issues, Retrieved from: https://www.imf.org/external/pubs/ft/reo/2016/eur/eng/pdf/rei1116.pdf
Kickert, W.J.M., Randma-Liiv, T., Savi, R. (2015) Politics of fiscal consolidation in Europe: a comparative analysis. International Review of Administrative Sciences, 81(3): 562-584
Ministry of Finance Republic of Serbia (2016) Fiscal Strategy for 2017 with projections for 2018 and 2019
Ministry of Finance Republic of Serbia (2015) Fiscal Strategy for 2015 with projections for 2016 and 2017
Mirdala, R. (2013) Lessons Learned from Tax vs. Expenditure Based Fiscal Consolidation in the European Transition Economies. Journal of Applied Economic Sciences (JAES), (1 (23)), 73-98