Serbia's arrangement with IMF successful, to become precautionary

BELGRADE - Reputation and trust are earned only through results and we, as the National Bank of Serbia (NBS) and a country, have earned that through the results shown by the International Monetary Fund (IMF) during its second review from October 19 to 31, and we expect this to be confirmed by the IMF Executive Board on December 21, NBS Governor Jorgovanka Tabakovic said on Wednesday.

At a press conference with Serbian Finance Minister Sinisa Mali, Tabakovic said the fundamental instrument that had enabled economic and financial stability in the country was a coordination between monetary and fiscal policy and everything President Aleksandar Vucic was doing, including with a view to attracting FDI.

She said a financial arrangement with the IMF would become a precautionary one and that 1.18 bln euros made available under the arrangement had been drawn to date.

"Around 300 mln was envisioned to be drawn after this second review... but we said we did not need that money because we have high liquidity and high FX reserves," Tabakovic said.

She said that, barring any unforeseen circumstances, the date of the transition to a precautionary arrangement would be December 21, when the IMF board is due to meet to formally adopt a report by the IMF mission that had visited Serbia.

Mali said the arrangement had been concluded successfully and that all objectives had been met in a timely manner.

"In spite of the crisis, our economy is stable and everything that is envisioned in the budget for next year is realistic and will be carried out. First and foremost, by that I am referring to improvement of the citizens' living standards through an increase of salaries, pensions and the minimum wage," Mali said.

He said the transition to a precautionary arrangement, proposed by the IMF, was also an important message to potential investors.

He said the national GDP was rising and had been up in Q3 as well, and that industrial production and the services sector were seeing growth, too.

Mali said GDP was projected to grow by 2.5 pct and 3.5 pct in 2023 and 2024, respectively, and added that the value of GDP would this year exceed 68 bln euros for the first time.