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The Government of the Republic of Srpska approves the 2021 Budget Proposal


The Government of the Republic of Srpska held toda the 17th special session during which it approved the Budget Proposal for 2021 which amounts to 3.795 billion BAM.

Minister of Finance Zora Vidović stated at the press conference after the session that according to the Budget Proposal, the Budget is 159 million higher than the second budget adjustment for this year.

"The budget is bigger since it is planned to have higher level of borrowing for the next year and also pensions increase", the Minister of Finance, Zora Vidović said and added that the Government today considered a set of laws and decisions related to the economic policy for 2021, which will be related to addressing the negative consequences of the pandemic.

"If we look at the budget for 2021 compared to the budget for this year that we made before the coronavirus pandemic, our savings are 183.5 million BAM. The costs increased by 286.8 million which was mostly influenced by the increase in salaries by 0.3 percent or 8.8 million on the account of the past service, then the amount for pensions which is higher by 39.5 million,  repayment of the debt which is higher by 189.5 million, grants to the business sector and health sector which are higher by 14 million", the Minister said.

According to Minister Vidović, in 2021, the Republic of Srpska will repay 567 million BAM of the debt principal in addition to about 120 million BAM of interest.

"We have subsidies of five million for new technologies in the economy and five million for newly employed workers. The old program for increasing salaries will continue next year, i.e. five million will be set aside for tax refunds and contributions for increasing salaries", Minister of Finance Zora Vidović said.

Minister Zora Vidović stated that allocations for agriculture amount to 75 million and for the employment of demobilized soldiers and children of fallen soldiers, the subsidy will be three million BAM.

"If we add to that grants to` Postal services` of one million, `Railways` 20 million and two million to the Airport, that is 116 million from the budget allocated for the economy, apart from the Compensation Fund which will amount to 90 million and which will serve for the needs of health care costs, but also selectively for the branches that will be most affected by the coronavirus pandemic", the Minister of Finance of the Republic of Srpska stressed.

The Minister of Finance, Zora Vidović, said that the public debt of the Republic of Srpska in 2021 will amount to 46.2 percent of GDP, and the upper limit is 55 percent.

The total debt of the Republic of Srpska at the end of 2021 will amount to 46.2 percent of GDP and the upper limit of indebtedness is 55 percent.

Minister of Finance Zora Vidović stated that the projected decline in GDP this year is 3.5 percent, but that GDP growth is projected to be 2.6 percent in 2021 and in 2022 and in 2023, it will be 3, 2 percent.

The Minister of Finance stated that the reforms in the areas of energy and transport markets will continue in 2021 as well as improving the competitiveness of agriculture, water management and forestry as well as the processing industry and the services.

"The reform of the health sector and the reform of the Employment Service are also very important, and above all the education reform, i.e. the adjustment of school programs to the economy. This means that secondary schools will be tied to the needs of economic activities and that those who graduate from high school could easily get a job", the Minister of Finance Zora Vidović emphasized. 

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