Serbia's finance ministry said it expects the country's economic growth to reach 4.2% in 2018, increasing its earlier forecast of 3.5% expansion.
The gross domestic product (GDP) growth projection for 2018 was revised upwards on the basis of the positive trends recorded in the first half of the year in the short-term macroeconomic indicators, the finance ministry said on Monday in its instruction to the government on drafting the 2019 budget.
Serbia's economic growth is expected to slow down to 3.5% in 2019, due to a high base in agriculture and construction this year, the finance ministry added.
Next year, the government plans to reduce the tax burden on the average net salary by 1 percentage point to 62% from 63%, cut para-fiscal charges and increase public investments.
"The medium-term fiscal policy aim is to maintain a low deficit, further reduce public debt, and use fiscal space to support economic growth," the finance ministry said.
The ministry's cumulative economic growth forecast for 2019-2021 stands at 11.9%, based primarily on an expected increase in domestic demand and steady growth of investments.
Last month, the International Monetary Fund (IMF) said it expects Serbia’s economy to expand by a real 4.0% in 2018, up from a growth rate of 3.5% projected in April. Serbia's GDP is expected to grow by 3.5% in 2019, the IMF said in its October 2018 World Economic Outlook report.