October 11 (SeeNews) - Serbia's Fiscal Council has recommended to the government to target a fiscal deficit equivalent to 0.5% of the gross domestic product (GDP) in 2018, in order to accomodate an increase of pensions and public investments.
A fiscal deficit of 0.5% would help cut public debt to 66% of GDP in 2018 and would would allow the government to spend enough money to achieve its economic targets, the Fiscal Council said in its recommendations posted on its website.
Public investments in Serbia have been insufficient and need to be increased by 300 million euro ($354.6 million) in 2018, which represents 0.8% of the projected GDP, the Fiscal Council said.
The head of the Fiscal Council, Pavle Petrovic, said earlier this month that wages in the public sector and pensions can be increased by up to 5% in 2018 as the GDP is expected to grow at the same rate in that year.
Last month, Serbia's Social and Economic Council decided to increase the minimum hourly wage to 143 dinars ($1.4/1.2 euro) from 130 dinars as of 2018.
Serbia's Fiscal Council was established in 2011 to assess the compliance of the fiscal policy of the government with the fiscal rules.
The Social and Economic Council, established in 2001, brings together representatives of the government, employers and trade unions.
(1 euro = 119.397 dinars)