Serbia has successfully completed a USD 1.32 billion three-year program with the IMF, that expires on February 22, the financial organization has announced.
Serbia exits the program “boasting outperformance on several of its goals” – however, “concluding it with flying colors is only the first step in building a strong and vibrant economy able to compete globally,” the IMF said.
“The program has done much better than expected, overperforming many of its macroeconomic goals,” said head of IMF’s Serbia team James Roaf.
“Serbia managed to dig itself out of a hole: after stalling for years in the wake of the global financial crisis, growth has now returned, coupled with rising investment and employment. A lot of work has been started to transform the country into a full-fledged market economy; these reforms need to be deepened after the conclusion of the program for Serbia to reach its full potential,” Roaf said.
The IMF recalled that in 2014, “Serbia’s economy was in serious trouble.”
“Following the 2008 global financial crisis, the country’s economy stagnated, while weak public institutions, collapsing tax receipts, and overspending by government and state-owned enterprises resulted in a rapid buildup of public debt. Recognizing the unsustainable situation, the authorities adopted an ambitious program of fiscal adjustment, financial sector strengthening, and broad-based economic reforms. The IMF supported the program with economic advice and monitoring, along with precautionary financing,” a press release said.
After three years of effort under the program, the economy has turned around, the IMF said, adding:
“The fiscal accounts, with the second-largest deficit in Europe in 2014, boasted a surplus in 2017. Economic confidence has improved with stronger investment both from foreign and domestic sources. Unemployment is near historic lows, and falling. Banks are solid, and nonperforming loans are now below their pre-crisis levels.”
The IMF further recommends the Serbian government to concentrate its efforts on helping the country “catch up faster with its Western European peers” – a goal that is “urgent to avoid the exodus of skilled Serbian workers in search of a better life.”
The “areas that need work,” according to the IMF, include reforming institutions and public services, overhauling state-owned enterprises, improving the business climate, and building better infrastructure.
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