Serbia hails end of austerity as parliament passes 2020 budget

BELGRADE (Reuters) - Serbia's parliament passed the government's spending plan for next year on Thursday, with Finance Minister Sinisa Mali saying that 2020 would mark the virtual end of austerity measures introduced in 2015.

The budget envisages a deficit of 20.2 billion Serbian dinars ($189.64 million), or 0.3% of gross domestic product, below its International Monetary Fund target.

The budget was based on a growth projection of 4% in 2020, up from around 3.5% this year.

The vote was a formality as the Progressive Party of country's President Aleksandar Vucic enjoys a comfortable majority of 165 deputies in the 250-seat parliament.

In a statement, Mali said: "Harsh but bold (austerity) measures are behind us, and the 2020 budget means higher public sector wages and higher pensions."

The measures were introduced as part of a precautionary 1.2 billion euro ($220.44 million) loan deal with the IMF that ended last year.

The government of Ana Brnabic has already increased wages in the public sector.

Belgrade and the IMF, which now has a non-financial and advisory deal with the Balkan country, had agreed this year that the 2020 budget would target an overall fiscal deficit of 0.5% of GDP, unchanged from this year.

Under provisions of the budget, revenues are expected at 1.314 trillion dinars, while spending is seen at 1.345 trillion dinars. Serbia would also allocate a total of 198.9 billion dinars for capital investments, mainly in infrastructure.

($1 = 106.5200 Serbian dinars)

($1 = 0.9073 euros)

(Reporting by Aleksandar Vasovic; Editing by Alison Williams)