Low energy prices in Serbia will have to increase and the energy sector will have to be transformed, said IMF mission chief to Serbia, Donal McGettigan.
Addressing the Kopaonik Business Forum at the Kopaonik Mountain, McGettigan said energy, state budget and fiscal policy are the focus of Serbia’s two-year arrangement with the IMF, which implies that the low energy prices must continue to increase.
He noted that Serbia was among the first countries that helped vulnerable categories of the population through discounted energy prices, but that now is the time for changes in the energy sector.
In addition to the increase in energy prices, state-owned energy companies should also undergo change, primarily the Electric Power Industry of Serbia (EPS), which should be transformed into a joint-stock company and get new management, said McGettigan, adding that EPS found itself in a bad position precisely because the company was poorly managed.
He also added that small and medium-sized companies in Serbia need help and that new regulations governing their business operations are needed.
McGettigan believes that the level of independence of other state-owned companies in Serbia should be elevated and that Serbia also needs stricter monetary policy measures, as well as continue working on reducing inflation, with an additional increase in interest rates.
He noted that the Serbia-IMF arrangement also stipulates curbing the country’s fiscal deficit, but also limiting the increase of pensions and civil servant salaries.
McGettigan concluded that Serbia had achieved excellent results in recent years in raising the gross product per capita, FDI influx, increasing the employment rate and reducing the unemployment rate, adding that the country’s financial consolidation is “impressive.”
(Danas, 06.03.2023)