Budget gains may mask Serbia's slow structural reform

Significance

The cabinet enters office just in time to host a fresh visit from the IMF, expected later this month. Despite another landslide victory in parliamentary elections on April 24, Prime Minister and Serbian Progressive Party (SNS) leader Aleksandar Vucic has been in no rush to form his next government. With parliament dissolved in early March, this has been a wasted year for reforms, economic or other. The next government must start working effectively if it is to make up for this, even partly.

Impacts

• Dusan Vujovic, confirmed as finance minister, will remain the focal point for implementing the SBA.
• A new law on financing local government is likely to be adopted in late August or early September.
• This will transfer a portion of revenues from income tax from local authorities to the central government.
• The new government will need to come up with a less ambitious plan for public sector redundancies in 2016 and 2017.