IMF increases Serbia's projected growth to 0.5%

The International Monetary Fund (IMF) revised Serbia's GDP growth to 0.5 percent on Tuesday after the mission concluded its second revision of the three-year precautionary agreement (2015-2017) worth 1.2 billion euros (about 1.36 billion U.S. dollars).

The IMF changed its projection of Serbia's GDP growth from -0.5 percent at the beginning of this year to 0 percent in the first revision this June.

At the press conference in Belgrade which closed their visit to Serbia, Serbian Finance Minister Dusan Vujovic, Head of the IMF Mission James Roaf, and the Governor of the National Bank of Serbia Jorgovanka Tabakovic agreed that reforms within the IMF's program gave good results to the country's economy.

Vujovic said that Serbia managed to escape from bankruptcy and arranged its finances, but said that the serious reforms still lie ahead.

"We went from a recession to a positive economic growth," Vujovic said, adding that the results are good and Serbia's economy is recording growth.

"Structural reforms still lie ahead, and privatization of enterprises should be completed, making public enterprises more efficient and reforming the country," he added.

Tabakovic said that she expects a positive assessment of the IMF board, confirming that the country is going in the right direction.

"Serbia will achieve balanced growth, stable prices, competitive economy and social progress", she said, adding that talks with the IMF resulted in agreement in all areas discussed.

Tabakovic estimated that the arrangement will prove as a successful one.

Roaf said that the increase in salaries and pensions which were decreased at the beginning of the year as a part of the agreement with IMF will be discussed in November when the mission will visit Serbia once more.

"IMF revised is highest projection of GDP growth to 0.5% and we expect that in the following period that the growth will accelerate. That will depend on further moves in macroeconomic policy, and intensified structural reforms that will improve the functioning of the economy," he said.

Roaf added that the deficit is lower than projected, income is gathered more efficiently, but that there is not as much of investments in Serbia as expected.

He said that the fiscal consolidation should continue in 2016 and 2017, until the Serbian arrangement with the IMF ends.