The Serbian government is ready to raise wages in the public sector this year and pensions in 2019, on the back of favourable fiscal revenues and in line with a non-financial arrangement with the International Monetary Fund, Finance Minister Sinisa Mali said on Tuesday.

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The government of the Balkan country this month moved from a small surplus to a deficit of 0.5% of GDP, to allow for additional capital spending and an increase of public sector wages and pensions.

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In an interview with Belgrade’s private O2 TV, Mali said that public sector wages would rise between eight and 15%, starting in December. Serbia’s average wage is 54,115 dinars ($511.17).

“Nurses will receive a raise of 15%, followed by doctors with 10%, while employees in the state administration will receive a raise of 8%,” Mali said.

Pensions would increase 5.4%, starting in January, while retirees would receive a one-off payment of 5,000 dinars in December. An average pension in Serbia stands at around 26,000 dinars.

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Earlier this month, the IMF said that a wage increase for public sector workers was justified, but warned that the overall wage bill is growing faster than nominal GDP for a second year in a row.

Serbia’s economy is set to grow 3.5% in 2019 and 4% in 2020, both the IMF and central bank said.

In the second quarter of 2019, the economy grew 2.9% and Mali said that growth may reach 3.7% for the whole year.

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