The National Bank of Serbia has no reform goals and unfinished tasks with the International Monetary Fund, it was concluded after the first day of the meeting with the IMF delegation, the NBS said in a statement.
It is stated that this conclusion was reached at today’s meeting because Serbia has ensured long-term stability of prices and the financial sector, that much has been done in the field of strengthening the financial sector, and that it is crucial to continue the good policy.
The official talks of the Serbian delegation with the IMF mission began today with a plenary meeting held in video format, and continued with a meeting on the topic of monetary policy and the financial sector.
The Serbian delegation was led by the Governor of the National Bank of Serbia, Jorgovanka Tabakovic, who is also the Governor of Serbia at the IMF, and the mission of that organization was led by Jan Kees Martein, while the Minister of Finance Sinisa Mali and his associates also participated in the talks.
The NBS announced that the IMF representatives reiterated that Serbia welcomed this crisis in a much better condition than some previous periods, which was an important precondition for our adequate reaction from the very beginning of the crisis.
It was assessed that a strong, timely and comprehensive package of measures in the fight against the pandemic was adopted in Serbia, as well as that Serbia has good growth prospects.
Summarizing the new macroeconomic projections, which include the latest trends, Tabakovic pointed out at the meeting dedicated to monetary and financial policy, that in the case of Serbia there is no doubt that the recovery will be fast and will have the best possible profile in the conditions that befell the world.
The NBS states that the IMF assessed that the measures of policy makers in Serbia were well designed and that they were aimed at supporting all sectors in the right way, which supported domestic demand and prevented the decline in business and consumer confidence.
“In Serbia, the effects of the first wave of the pandemic, ending in April, were within the framework of our assumptions on the basis of which we made macroeconomic projections. Since May, the recovery in all months has been faster than we expected,” Tabakovic said.
She added that the turnover in retail trade returned to the pre-crisis level in June, while industrial production returned to that level in August, when it exceeded it.
“Given that we have exceeded the pre-crisis level of industrial production and that the results in agriculture are even better than we thought, it is quite realistic that we now expect a GDP growth rate of -1 percent this year with risks upwards. Next year, we expect a complete economic recovery and a growth of gross domestic product of about 6 percent,” she said.
Tabakovic said that regarding the measures of monetary, macro and micro prudential policy, the NBS continued with the multi-year approach of intervention on the foreign exchange market with the aim of preserving the relative stability of the exchange rate.
She reminded that the package of measures encourages future economic growth and mitigates the negative effects of the pandemic on the population and the economy, while preserving financial stability.
As she stated, part of the measures aims to enable the population easier access to housing loans, and thus to support the construction industry through faster turnover of funds.
Tabakovic pointed out that the minimum degree of construction of facilities whose purchase can be financed with housing loans from banks has been reduced, while the criteria that both the financing itself, ie the investor and the facility under construction must meet, are clearly defined.
She added that even more favorable dinar loans from the guarantee scheme were supported, and the efficiency of NBS measures and the effects of overall policy coordination were proven in practice through even more favorable and accessible sources of financing for all market participants, as well as relative stability of yields on the domestic government securities market of value, in conditions of increased volatility in financial markets.
Talks with the IMF mission, which will last until October 16, will take place as part of the fifth, last semi-annual review of the economic program supported by the Policy Coordination Instrument.
This type of cooperation with Serbia was approved by the IMF in July 2018 for a period of 30 months, it is of an advisory nature and does not envisage the use of financial resources, RTV reports.
