Serbian parliament adopts 2015 budget

The budget, based on a projection for a 0.5% contraction in real terms in gross domestic product (GDP) next year, projects revenues of 924.4 billion dinars ($9.2 billion/7.57 billion euro) and outlays of 1,082 billion dinars, the government said in a statement, adding that the inflation target is set at 4.0%, give or take 1.5 percentage points.

Parliament also endorsed a bill to extend state guarantees for $200 million (164 million euro) in loans that state-owned gas monopoly Srbijagas plans to take out while also approving plans by the government to convert into public debt 162 million euro in financial obligations of national flag carrier Air Serbia.

In August last year, Etihad Airways signed a strategic partnership deal to acquire 49% of then state-owned JAT Airways while getting a five-year management contract for the airline and rebranding it to Air Serbia. The remaining 51% stake in the flag carrier is held by the Serbian government.

As part of the deal, the Serbian government had vowed to take over the debts of JAT Airways.

Serbia's budget for next year includes the cost of government guarantees for state companies - previously booked as below-the-line accounts, and those raise the total deficit target to 191.4 billion dinars, equivalent to around 4.0% of GDP.

The government in Belgrade expects a GDP drop of 1.0% this year. The Serbian economy expanded by a real 2.5% in 2013.

(1 euro=122.0754 Serbian dinars)