NBS: Successful conclusion of IMF arrangment confirms credibility of Serbia's policies

BELGRADE - The IMF Executive Board decided on Monday the fourth and last review of the implementation of the current stand-by arrangement concluded with Serbia in December 2022 for a period of 24 months has been completed successfully, and approved a three-year Policy Coordination Instrument, the National Bank of Serbia (NBS) has said.

"The IMF estimated that Serbia has successfully implemented measures within the agreed economic programme and exceeded the plan, with excellent prospects going forward," the central bank said in a statement late on Monday.

"The successful conclusion of the fourth and final review of the Stand-By Arrangement confirms yet again that Serbia is implementing credible policies. The fact that the IMF approved the Policy Coordination Instrument to Serbia for the third time shows that the IMF expects sound economic policies to continue in the medium term as well. This non-financial and advisory instrument is intended for countries pursuing a strong economic policy, which is what Serbia is doing. This is backed by the expected acceleration of GDP growth to the range between 4 pct and 5 pct in the coming years," NBS Governor Jorgovanka Tabakovic said.

"The IMF estimated that within the SBA, Serbia implemented ambitious reforms, contributing to the achievement of outstanding macroeconomic results:

- In October 2024, Serbia received its first-ever investment grade rating;

- Strong economic growth in challenging global conditions, with growth above 4 pct expected in the coming period;

- Fiscal deficit and public debt have been reduced despite numerous challenges;

- Inflation has been brought back into the target band amid robust growth and a preserved labour market, thanks to the central bank’s adequate monetary policy;

- FX reserves are at a record high level;

- The financial system is stable owing to adequate capitalisation, high liquidity and strong profitability;

- The financial position of energy state-owned enterprises has been strengthened;

- Significant progress has also been made in implementing reforms to improve public investment management and SOE governance.

The completion of the fourth review enabled the withdrawal of funds amounting to around 400 mln euros (316.47 mln SDR).

Given the achieved results and the continued stability of economic indicators in our country, the arrangement has been treated as a precautionary arrangement since the second review of the programme (which was one review earlier than initially expected upon approval), and since then, the available funds have not been used," the NBS said.