Serbian PM presents a post-crisis model of economic growth and development of Serbia
09. October 2010. | 06:53
Source: Emg.rs, Infobiro.tv
Speaking at the presentation of a post-crisis model of economic growth of Serbia for the period 2011-2020, Cvetkovic explained that according to this model, total investment should grow annually by 9.7%, both private and public.
Prime Minister Mirko Cvetkovic said today that a new model of economic growth and development of Serbia should be based on three pillars – more investment, support to the economy, especially in the part that is export-oriented, and investment in infrastructure.
Speaking at the presentation of a post-crisis model of economic growth of Serbia for the period 2011-2020, Cvetkovic explained that according to this model, total investment should grow annually by 9.7%, both private and public.
In order for this investment to grow, we must have an attractive economic environment and it is the government’s task to provide it through the implementation of reforms, the Prime Minister asserted.
He noted that the state ought to give support to the economy, especially to the processing industry and agriculture because they make tradable goods and estimated that this would spur exports which would be the driving force of economic growth.
The state must continue with investment in infrastructure and thus provide a more favourable business environment and create conditions for new jobs, Cvetkovic emphasised.
The key proposal of the new model of growth is to encourage investment growth and cut the growth in spending and the share of investment in GDP should be increased to 25% in 2015 and 28% in 2020. On the other hand, the share of spending in GDP should be cut from 92.5% in 2011 to 81% in 2020.
The share of export of goods and services in GDP would be increased from 27.6% in 2009 to 65% in 2020, while the balance of payments deficit would be reduced from 7.1% in this year to 3.3% in 2020.
This would enable a 5.8% annual growth in GDP and its value would reach €52.7 billion in 2020, or almost €8000 per capita.
Following these dynamics, employment would grow by 16.9% in the given period, which means that 430,000 new jobs would be created.
According to assumptions of the new model of growth, the average growth of industrial production in the period 2011-2020 is projected at 6.9% annually.
The basis for production growth would be created by ample investment growth from €4.9 billion in 2009 to almost €15 billion, as expected in 2020.
Foreign direct investment will have a very important role and this should reach the level of €2.3 billion per year.
The post-crisis model of economic growth of Serbia for the period 2011-2020 has been prepared by a leading team of Serbian economic experts, gathered around the Fund for development of economic sciences at the Belgrade Faculty of Economics and a publication of the Belgrade Institute of Economics titled “Macroeconomic analysis and trends.”
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