Can Serbia get an investment rating and a new stand-by arrangement with the IMF?

After meeting with the IMF representatives in Washington, Finance Minister Siniša Mali said that the Serbian economy received a positive rating and that it is expected to receive a formal investment rating this or next year.

 Also, Serbia will enter into a new two-year arrangement with the IMF. “The current agreement with the IMF expires at the end of this year and, at the meeting, it was agreed for it to be extended by another two years at least”, Mali said.

Dejan Šoškić, a professor at the Faculty of Economics in Belgrade and the former National Bank of Serbia governor, says that he does not see a direct connection between the investment rating and the arrangement with the IMF. He adds that is a whole series of different forms of arrangements and that there are countries that received support from the IMF despite having a stable macroeconomic situation.

“Usually, it’s the countries that have some kind of macroeconomic vulnerability that have an arrangement with the IMF, and that is true in principle, and as a rule, countries that do not have macroeconomic problems or other visible problems should receive an investment rating. However, our arrangement is more advisory and does not imply that there are those kinds of problems that would require financial support,” says Šoškić.

Serbia is making an effort to get an investment rating, which would help the country to borrow cheaper, but also put it on the map of some bigger investors. The last stand-by arrangement with the IMF was signed in 2022, when Serbia received a loan in the amount of 2.4 billion euros.

“I don’t know of a country that has an arrangement with the IMF and also has an investment rating”, says Ivan Nikolić from Macroeconomic Analysis and Trends (MAT) magazine, and adds that the new arrangement with the IMF will probably be of an advisory type without a financial component.

(Nova Ekonomija, 23.04.2024)

This post is also available in: Italiano

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