At the sitting held on 14 October, the Industry Committee considered the Information on the economic and financial prerequisites to remedy the negative economic trends in the fourth quarter of 2009 and create an economic ambiance conducive to increase production in 2010.

The sitting was attended by the Governor of the National Bank of Serbia, Radovan Jelasic, representatives of the Ministry of Finance, Serbian Chamber of Commerce, Independent Trade Union of Serbia and Union of Employers.

Briefing the Committee members on the current state of the economy, representatives of the Independent Trade Union of Serbia, Union of Employers and Serbian Chamber of Commerce stressed that the poor state of the economy stems from the inadequate results of the measures the Government of the Republic of Serbia employed to alleviate the effects of the global economic crisis, primarily the social packet of measures which decreased the tension but did not solve the workers’ problems. Poor social dialogue between the Government, employers and unions, the annulment of over 20% of privatisations, companies declaring bankruptcy or being liquidated were also listed as causes of the problem. The metal complex suffers the most difficult situation, along with the textile and construction industry. They emphasised that the overall picture is very bad even though industrial production has lately shown a modest growth. For the time being, there is no deepening of the downward trend in production, but there is no improvement either, and a great many companies are blocked, amounting to 216 billion RSD.

The Governor of the National Bank of Serbia Radovan Jelasic briefed the Committee members on the basic macroeconomic trends in the country. He stressed that the inflation rate in the period September 2008 – September 2009 amounted to 7%, and is expected to amount to about 8% this year. According to plan, inflation should be reduced to 4% ± 1.5% by 2011, which is important for macroeconomic stability. The drop in economic growth in 2009 was less than expected, amounting to about -3%. 1.5% growth is expected in 2010. Decreased demand resulted in poor foreign trade and low current payment deficit, amounting to about 1 billion RSD. The exchange rate is still stable, the fiscal deficit has risen and in the first eighth months this year amounted to 77 billion RSD. In the first eighth months of 2009, the public debt was 960 million EUR and rose from 26% to 31.3 % GDP. NBS has decreased the reference interest rate from 17 to 11%, there is no decrease in the volume of commercial bank loans to legal entities, while the volume of household loans has decreased. The volume of cross-border loans has risen. By September, companies had taken 603 million EUR worth of foreign loans, while banks took 960 million EUR. The number of blocked companies has risen to 10.5 % and those companies that have been blocked for more than 30 days exhibit the biggest growth.

The discussion mainly focused on the issue of blocked companies and illiquidity, unfavourable interest rates for the economy and assistance for companies through the Development Fund and tax system reform.

The sitting was chaired by the Chairman of the Industry Committee, Milorad Buha.