IMF: Serbia's 2024 growth to be close to 4 pct, public investment to rise

WASHINGTON - Under an International Monetary Fund (IMF) projection, Serbia's economic growth will be close to 4 pct in 2024 and higher in the coming years based on continued real wage and employment gains and rising public investment.

"Inflation is expected to converge over time to the 3 pct central target of the tolerance band amid robust domestic demand and supply-side constraints. The current account deficit is anticipated to widen on strong private consumption and infrastructure spending, but foreign direct investment inflows will allow for further reserve accumulation," the IMF said in a report released following its approval of a new three-year arrangement with Serbia.

Under the PCI, Serbia's public debt is slated to decline to 45 pct of GDP in 2025.

"Under the PCI, the fiscal program is based on a fiscal deficit of no more than 3.0 pct of GDP over 2025-27 and 2.5 pct of GDP over 2028-29, which balances public spending priorities with fiscal discipline, helps ensure project prioritisation within an ambitious public investment envelope, and further reduces public debt," the report said.

"Under the Stand-By Arrangement (SBA), the Serbian authorities pursued ambitious reforms, helping achieve strong economic outcomes, including reducing fiscal deficits, public debt, and inflation, while maintaining strong growth and increasing international reserves to record highs. This strong performance contributed to Serbia’s first-ever investment grade rating in October 2024," said IMF Deputy Managing Director Bo Li.

"By building on the SBA, the 36-month Policy Coordination Instrument (PCI) program will support the Serbian authorities in their continued commitment to sound macroeconomic policies, fiscal discipline, and broader structural reforms," he added.