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BELGRADE (Serbia), October 9 (SeeNews) - Serbia's fiscal council expects the country's economy to expand by 4.4% in 2018, higher than the 4.0% growth rate projected in December 2017, it said on Tuesday.
The economic growth of Serbia is mainly driven by one-off factors such as the strong increase of agricultural production following the drought in 2017, the fiscal council said in a report outlining recommendations for the 2019 draft state budget.
Without extraordinary factors, the economic trends in Serbia in 2018 are sensitive and weaker than the average of comparable countries of Central and Eastern Europe countries, the fiscal council said.
The council expects Serbia's budget surplus to stand at 35 billion dinars ($338 million/295 million euro) in 2018, or 0.7% of the projected gross domestic product (GDP), as the income will be higher than forecasts by 50 billion dinars.
In 2019, Serbia is forecast to record a budget deficit equivalent to 0.5% of GDP, which will release financing of up to 450 million euro ($514.7 million) to increase public investment and reduce tax burden.
The debt-to-GDP ratio, in turn, is expected to decline below 55% at the end of this year, as the government will repay some of its debt through own funding.
Serbia's Fiscal Council was established in 2011 to assess the compliance of the government's financial policy with the fiscal rules.
(1 euro = 118.445 dinars)