May 25 (SeeNews) - Serbia's president Aleksandar Vucic said on Friday the government has decided to increase pensions by between 5% and 25% by the end of 2018.
The government has decided to abolish the law on temporary reduction of pensions, in force since 2014, Vucic told reporters in comments aired live by public broadcaster Radio Beograd 1.
Serbia adopted the law in 2014 to reduce budget deficit, while now a budget surplus of 150 billion dinars ($1.48 billion/1.27 billion euro) is expected in the first half of 2018, Vucic said.
With the law, the Serbian government cut pensions higher than 25,000 dinars by between 22% and 25% in 2014 as part of measures to reduce fiscal deficit.
Earlier this month, Serbia's prime minister Ana Brnabic said the abolishment of the law was proposed by the International Monetary Fund during its recent talks with the government on concluding a new, non-financial arrangement with the country. In February, Serbia exited a successful $1.32 billion three-year stand-by programme with the IMF that overperformed many of its macroeconomic goals.
After the abolishment of the law, the pensions above 50,000 dinars will be increased by 9.1% compared to 2014, whereas pensions above 120,000 dinars will be lifted by 8.4%, Vucic said.
The pensions below 37,000 dinars will be increased by between 10.4% and 13.7% compared to 2014.
Brnabic said earlier this month the government is considering the introduction of a system for adjustment of pensions to the rate of economic growth once in two years.
After three years of effort under the programme with the IMF, Serbia's economy has turned around, as fiscal accounts recorded a surplus in 2017, economic confidence improved with stronger investment both from foreign and domestic sources, while unemployment is near historic lows, and falling, banks are solid, and non-performing loans are now below their pre-crisis levels, the Fund said in February.
(1 euro = 118.182 dinars)