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IMF: Serbia’s GDP growth higher than predicted

The mission of the IMF stated on Thursday that it expected Serbia’s real GDP growth to be 4.2 percent this year and 3.5 percent in 2019.

At the end of their visit to Belgrade for the first consideration of a new arrangement, they also indicated that structural reforms should be accelerated, Beta agency reported.

The full implementation of the program of structural reforms will have additional positive effects on the growth potential, reads the statement of IMF Mission chief James Roaf.

It was pointed out that total inflation in Serbia increased to 2.6 percent in August and that it was expected to stay around the middle of the three-percent target band during 2018 and 2019.

Good macroeconomic results are still being accomplished. In 2018, growth accelerated thanks to private spending and dynamic foreign direct investments and exports. Conditions on the labor market continued to improve, with significant growth of employment in the formal sector, a drop in unemployment and stable growth of salaries in the private sector, Roaf said.

He added that, according to estimates, the general level of the state would register a surplus in the amount of 0.6 percent of GDP, with the higher than expected execution of capital spending.

The public debt should fall under 55 percent of GDP by the end of the year, while yields on state securities have stabilized at levels close to historic minimums. Considering the positive fiscal results, the government abolished the temporary reduction of pensions, dating back to the crisis period, which will come into effect in November 2018, while making sure that the overall share of pensions in GDP does not increase, Roaf said.