The Board of Executive Directors of the International Monetary Fund (IMF), which approved a new advisory program for cooperation with Serbia, assessed that Serbia has excellent prospects, the National Bank of Serbia (NBS) announced today.
“The IMF estimates that the macroeconomic stability that the authorities achieved with great effort in the pre-crisis period, with a large package of support measures to combat the negative effects of the crisis, helped mitigate the adverse impact of the pandemic on economic activity,” it is stated in the announcement.
According to Governor Jorgovanka Tabakovic, the new program will aim to preserve macroeconomic and financial stability, with the support of continuing the implementation of structural reforms in order to achieve even stronger and sustainable economic growth.
The IMF estimates that the real growth of the gross domestic product (GDP) of Serbia will reach six percent in 2021, 4.5 percent in 2022, and four percent in 2023.
It was pointed out that continuous monitoring of risks in the banking sector is necessary, especially when crisis measures gradually cease to be valid, and that it is important to maintain the reform momentum in order to encourage stronger, more resilient and inclusive medium-term growth, said the NBS.
The IMF projects continued low inflation, dynamic export growth and growth in Serbia’s foreign exchange reserves, as well as a fiscal framework that simultaneously reduces the share of public debt in GDP to below 50 percent in the medium term and supports the economy through high capital investment.
“The IMF also expects that Serbia will continue to justify investor confidence, which can be seen in the projected continuation of high inflows of foreign direct investment of about a frequent percent of GDP, which, as before, will cover the current account deficit,” said Tabakovic.
The priorities of Serbia’s new arrangement with the IMF are strengthening the fiscal policy framework, strengthening governance in state-owned enterprises, further developing the capital market and increasing dinarization, improving the provision of social support, as well as the transition to a green economy.
The arrangement has been approved for a period of 30 months, and the progress of the agreed economic program will be monitored through five semi-annual reviews of the results, which will evaluate its implementation.
“Everyone’s assessment is that Serbia responded strongly to the pandemic, and we were able to react strongly, because in the previous period we built a stable and stronger Serbia in which investments are made. Saving people’s lives and preserving the economy were our key task during this crisis, and already in the first quarter of this year, our GDP exceeded the pre-crisis level, which is earlier than in most other economies,” Tabakovic pointed out, Danas reports.
