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Home/News/IMF Delays New Deal With Serbia Until It Names New Finance Minister

IMF Delays New Deal With Serbia Until It Names New Finance Minister

The International Monetary Fund and Serbia have postponed a staff-level agreement over a new non-financial deal with Belgrade until it appoints a new finance minister, the lender said in a statement on Friday.

Serbian Prime Minister Ana Brnabic took over the responsibilities of finance minister this week pending the appointment of a successor to Dusan Vujovic, who quit this month citing personal reasons.

“We have reached agreement on key policy elements of the new program, and intend to return shortly to finalize the discussions, once the new Finance Minister has taken office,” the IMF said in a statement.

The new agreement will be supported by a Policy Coordination Instrument, an arrangement drafted by the IMF to provide policy advice and monitoring for countries that do not need financial support.

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

“We confirmed agreement on policy objectives, including to foster higher, sustainable growth, to maintain fiscal discipline and financial stability, and advance … structural reforms,” the IMF said.

Serbia is expected to have a budget surplus in 2018, following a small surplus last year. Inflation is expected to reach about 2 percent by year’s end, the IMF said.

Serbian President Aleksandar Vucic met the IMF mission, and his office said they had discussed an increase in public sector wages and pensions this year and next.

They also agreed that, by the end of 2018, the state-operated RTB Bor, Serbia’s sole copper mine and foundry, and the Petrohemija and MSK petrochemical plants should be either fully or partly privatized.

Inflation in April stood at 1.1 percent, down from 1.4 percent in March and below the central bank’s target band of 3 percent, plus or minus 1.5 percentage points.

Source; Reuters