Serbia, IMF start talks on new non-financial arrangement

BELGRADE, June 11 (Reuters) – An International Monetary Fund (IMF) mission began three days of talks with Serbian officials on Monday expected to yield a non-financial arrangement with Belgrade, the finance ministry said.

In February Serbia ended a three-year 1.2 billion euro ($1.4 billion) deal with the IMF under which it undertook measures to reduce public debt and the budget deficit, including cuts in public sector wages and pensions. It did not draw on any funds.

The goal of the new arrangement is to maintain macroeconomic and fiscal stability while supporting structural reforms designed to speed up Serbia’s economic growth and make it more sustainable in the medium and long-term, the ministry said in a statement.

The head of the IMF mission James Roaf and Serbia’s newly-appointed Finance Minister Sinisa Mali agreed that public finances had stabilised but that there was a need to maintain fiscal discipline, continue efforts to reduce public debt and strengthen Serbian institutions.

Mali took office on May 29, replacing Dusan Vujovic who resigned earlier in the month.

They also discussed the government’s plan to reverse the pension cuts and increase payments this year and next, as revenues allowed for such a move, according to the statement.

The new deal would be supported by a Policy Coordination Instrument, an arrangement drafted to provide advice and monitoring for countries that do not need financial support.

Serbia ended 2017 with a small budget surplus and it may do so again this year. The economy grew 4.6 percent year-on-year in the first quarter and is forecast to expand around 3.5 percent this year. (Reporting by Maja Zuvela in Sarajevo; Editing by Daria Sito-Sucic and David Stamp)


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