The
electricity price hike that Serbia has agreed with the International Monetary
Fund (IMF) will be "twice less than planned", Belgrade-based media reported on
Tuesday, quoting Serbian prime minister Aleksandar Vucic.
On Monday,
local media quoted Vucic as saying that Serbia expects it may be possible to
lower the electricity price hike agreed with the IMF after the country's deficit
in the first quarter came in sharply below plan.
Earlier on Tuesday,
Vucic said Serbia's budget deficit stood at 21.5 billion dinars ($194.7
million/179.3 million euro) in the first quarter of the year, lower than the
planned 55 billion dinars and noted that one of the reasons for the
overperformance was an increase in non-tax revenues.
When the efforts to
raise public sector salaries and pensions succeed, the increase in electricity
tariffs will not be too much of a problem for the citizens, news agency Tanjug
reported on Tuesday, quoting Vucic.
Earlier in the day, Vucic said that
the government will see what it can do in terms of raising public sector wages
and pensions as the country's economy seems to be rebounding on the back of
tough fiscal consolidation measures implemented with the backing of the IMF and
the World Bank, alongside other supporters.
Serbian state-owned power
utility EPS is set to request an increase in the regulated electricity price for
end consumers that, in combination with a planned excise tax, would result in a
total price increase of 15% as of April 1, a memorandum of economic and
financial policy submitted by the government in Belgrade to the IMF indicated in
February.
The document outlines the economic policies that the Serbian
government and the country's central bank intend to implement under a 1.2
billion euro ($1.32 billion) three-year standby arrangement with the
IMF.
On Tuesday, Zagreb-based Hypo Alpe-Adria-Bank said in a daily note
to investors that the performance of Serbia's budget deficit, coming in lower
than expected, owes this outcome to one-off effects, such as dividend payments
from state-owned enterprises (SOEs) and lower capital expenditures, and will
hardly be sustained throughout the whole year.
"Furthermore, we think
that SOEs restructuring and privatization process is going slower than planned
and hence, we keep our sceptical view that the sovereign will manage to finalize
this process in 2015," Hypo said.
In 2014, Serbia's economy fell into
recession for the third time in six years, partially due to the devastating
floods that hit the Balkan state in May.