What’s the state of Serbian economy ahead of the IMF’s arrival?

The International Monetary Fund mission, led by Donal McGettigan, will meet with the Serbian government tomorrow to discuss the third review of the current arrangement that Serbia has with the Fund.

These talks will focus on budget expenditures for capital investments, but also the reforms in public companies, such as the Electric Power Industry of Serbia (EPS) and Srbijagas.

McGettigan notes that the Serbian economy is resilient and that it has resisted global shocks impressively.

When asked how he would describe the Serbian economy at the moment, he said – resilient.

“That’s how I see the Serbian economy. It has resisted the recent global shocks impressively. The growth continues and the inflation is slowing down. The public debt is below 60% of the GDP and continues to drop. The reserves are at a record-high level. All this speaks in favour of strong macroeconomic indicators and the resilience of the Serbian economy”, said McGettigan.

He pointed out that Serbia was facing the challenge of continuing to improve its macroeconomic stability and having strong sustainable growth.

“That requires more than just macroeconomic stability. It requires solving deeper, fundamental strategic issues. This will help create strong, sustainable, inclusive and environmentally friendly growth”, he added.

Talking about the FDI influx, McGettigan said that they were very strong and varied, but also resilient.

“This is down to the firm macroeconomic policy, macroeconomic stability and the extraordinary geographic position of Serbia. The latest global economic projections done by the International Monetary Fund show that we expect Europe to recover, which should, at the very least, help Serbia regarding foreign direct investments”, he went on to say.

When asked about the planned investments of over EUR 17 billion in the next four years in the EXPO 2027 exhibition and whether he believed it was risky in terms of the public debt, as there was no cheap money available in the market, he said that he said that the public investments were high and strong and correspond to the current public debt and solid public finances.

“If we look back on the past several years, Serbia has had plenty of public investments, which coincided with the drop in the public debt, stable public finances and a good outlook for the sustainability of the public debt. The reason for that is that this investment is carried out in the context of firm fiscal management and, especially, a strong control of the spending on pensions and (civil servant) salaries, which is very expensive. That is why we believe that it is necessary to take care of those big investments and big spending and that new fiscal rules should be strictly adhered to. It is also necessary to manage the public investments well and make sure that they are carefully chosen”, McGettigan concluded.

(eKapija, 13.03.2024)


This post is also available in: Italiano

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