IMF Commends Pace of Reforms in Serbia

The IMF Mission in Serbia on Tuesday approved the second review of the three-year financial arrangement while the official agreement is expected to be sealed at an IMF meeting in mid-October.

James Roaf, head of the IMF Mission, said in Belgrade that the delegation was satisfied with the progress Serbia had made in macroeconomic stability and fiscal consolidation.

Meanwhile, a decision on whether to increase pensions and pay in the public sector, as Prime Minister Aleksandar Vucic recently promised, has been postponed until the new IMF visit in November.

Since November 2014, wages over 200 euros in the public sector, including public and state enterprises, have been cut by 10 per cent. Pensions are being reduced progressively, by 22 per cent over the amount of 200 euros and by 25 per cent over the amount of 330 euros.

The average salary in Serbia is around 375 euros a month.

The IMF Mission began the second revision of its arrangement with Serbia on August 21. The arrangement, approved in February 2015, is worth 1.2 billion euros.

Roaf said the IMF was revising the estimate of GDP growth in Serbia this year to 0.5 per cent, which means the country will not enter a recesion.

"There was a fear that the major fiscal belt-tightening this year will endanger [economic] growth, but instead we saw growth as well as increased employment and decreased unemployment," Roaf said.

He noted that inflation and the exchange rate for the Serbian currency, the dinar, were stable.

According to him, worse news for the Serbian economy was that public investment was lower than expected.

Roaf urged the government to accelerate structural reforms in order to the spur the economy and GDP growth.

Finance Minister Dusan...