The International Monetary Fund (IMF) said that its mission, led by Jan Kees Martijn, said that it had productive discussions with the Serbian authorities and made progress towards the staff level agreement on policies needed to complete the second review of the arrangement with official Belgrade.
“Given the unusual economic uncertainty, follow-up discussions will be needed over the coming months. The agreement is subject to approval by the IMF Managing and Executive Board. Consideration by the Board is tentatively scheduled for the second half of June 2022,” the press release said.
It said that the Serbian economy navigated the COVID-19 pandemic well but warned that the war in Ukraine is a big economic shock affecting the global economic outlook, and particularly Europe’s and Serbia’s. “It is expected to weigh on Serbia’s economic recovery through supply chain disruptions, higher global commodity prices, effects on global financial conditions, confidence, and lower growth of trading partners,” the press release said, adding that “Serbia’s medium-term outlook, while uncertain, remains favourable, supported by the authorities’ commitment to structural reforms”.
The IMF mission said that immediate policy priorities include preserving macro-fiscal and financial stability and mitigating the impact of the ongoing external shock. “The National Bank of Serbia (NBS) should stand ready to tighten monetary policy further as needed to contain second-round effects of higher imported prices on inflation while also considering the evolving outlook for growth.
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