Serbia's budget deficit at the end of the first quarter of 2012 was considerably higher than the figure agreed with the International Monetary Fund (IMF) and economists assessed that savings measures should be implemented as soon as possible and that competent bodies should also consider measures that would improve the situation in public finance in the long-run.

In an interview for Tanjug, Director of the Belgrade Institute of Economic Sciences Dejan Eric said that the published budget deficit is not good news and that this is something that should constitute a concern for everyone in the country. However, it should be remembered that this is the result of several factors, including severe winter and the fact that this is the election year.

One thing is certain - the new government and prime minister will surely face a very serious task in terms of budget revision, Eric said and advised that the focus of the arrangement should be shifted to revenues, although some savings would have to be made in terms on the side of expenditures. Eric said that there is no reason to spread panic because this is just the first quarter of the year and there is a chance that the budget deficit would drop by the end of the year.

Economist Ljubomir Madzar stated that the level of budget deficit is disturbing but does not come as a surprise since there are a lot of points on the expenditure side of the budget, and these can be reduced.

A lot of these expenses are legally formalised and this is the legal obligation which the government cannot shun, Madzar stated. On the other hand, the situation with the budget revenues is not encouraging at all and revenues are constantly lower than expected, he underscored.

Associate of the Institute for Economy Ivan Nikolic stated that the issue of the budget deficit is almost alarming and that it should be immediately resolved, and underlined that the biggest task which the future government should tackle is to find a way as soon as possible to stop the existing divide in the budget from spreading further.

Speaking about the measures which should be implemented, Nikolic said that in the short-run, these would be savings measures while an increase in certain revenues should be taken into account if necessary, but not before the capacities and possibilities for making savings have been objectively inspected.

This would entail a new recession impulse, which is why relevant bodies need to consider the ways for the country to ensure that the economic growth remains strong enough by creating a new investment cycle.