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Serbia relaunches talks with IMF

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(Globalpost/GlobalPost)

Officials from the International Monetary Fund were expected here this week to relaunch talks with the Serbian government after the fund's previous loan was frozen, the IMF said on Monday.

"At the request of the Serbian authorities, an IMF staff visit ... is scheduled for October 1-7," a statement from the fund's mission here said.

"The mission will discuss recent economic developments and the government's policy agenda for 2014 and the medium term."

Contacted by AFP the IMF mission to Belgrade did not provide any further detail on the agenda of the visit.

The previous loan, worth one billion euros ($1.3 billion), was frozen in February 2012 as the previous government had not complied with budget commitments.

At the time, the IMF demanded the 2012 budget deficit should not exceed 4.25 percent of gross domestic product (GDP) while public debt be limited to 45 percent of GDP.

In April, Russia granted to Serbia a $500-million loan aimed at helping the Balkan country cover its budget shortfall. It linked part of the loan with Belgrade's agreement to a stabilisation programme with the IMF.

In July, the Serbian parliament approved a revised 2013 budget raising the country's deficit to 4.7 percent of GDP, compared to an initially planned 3.3 percent.

The government said the deficit would be funded by loans from domestic and international creditors, as well as by the sale of euro-denominated bonds.

The revised budget was based on a 2.0 percent GDP growth projection and projected inflation of 5.5 percent for this year.

Serbia's economy contracted by 1.7 percent in 2012, unemployment stands at 24 percent, while public debt is higher than 60 percent of GDP.

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http://www.globalpost.com/dispatch/news/afp/130930/serbia-relaunches-talks-imf