IMF: Serbia passes the sixth revision

Executive directors of the International Monetary Fund (IMF) confirmed on Friday, that they had given positive opinion of the sixth review of the Precautionary Arrangement which the institution signed with Serbia in February 2015 and assessed that Serbia had improved its business environment considerably.

Deputy Managing Director of the IMF, Tao Zhang stated that the arrangement the Fund had signed with Serbia was yielding results, supported by the macroeconomic situation and structural reforms. 

– The economy continues to strengthen, supported by the authorities’ efforts to improve public finances, address structural weaknesses, and strengthen the financial sector – Zhang wrote in his statement.

The employment rate is growing, the IMF states, the inflation remains under control, and the public debt has begun to drop. The full implementation of regulations and the reform agenda are crucial for improving the business climate and supporting medium-term growth. 

– Significant progress has been made in fiscal consolidation in 2016, on account of strong revenues and ongoing expenditure control. Institutional reforms aim to secure fiscal sustainability and improve public services – Zhang wrote.

He adds that Serbia has achieved notable improvement in the business environment, but more needs to be done to boost investor confidence and medium-term potential growth.

According to him, particular efforts should be made to improve the court system, strengthen the quality of the judiciary process, and facilitate the use of effective out-of-court arbitration.

Priorities include the continuation of reforming the public administration and wage system, and strengthening public investment management. Further efforts are also needed to minimize fiscal risks through restructuring of unviable state-owned enterprises, especially in the mining, energy, and transportation sectors.

Serbia signed the Precautionary Stand-By Arrangement with the IMF, worth around EUR 1.2 billion, in February 2015, and the completion of the sixth review has put around EUR 850 million at the country’s disposal.

(eKapija, 18.12.2016)

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