IMF insists on tighter fiscal policy, Vucic says GDP growth to slow down

The growth of Serbia's gross domestic product will slow down to three percent by the end of the year, said the President’s Office following his meeting with the IMF delegation, adding that this is due to the crisis in Ukraine.

“In connection with this, the IMF representatives insisted on a tighter monetary and fiscal policy and that I propose adequate measures in line with that,” said the press release, not elaborating on the potential measures.

The Office said that Vucic thanked the IMF for the proposals and said that, since the beginning of the fiscal consolidation in 2014, Serbia has always honored IMF’s recommendations and actively cooperated with this institution.

Unlike in the previous years, when Serbia first had a precautionary arrangement and then also a new instrument called the Policy Coordination Instrument (PCI), the Serbian state leadership this year decided to enter into a stronger arrangement with the IMF. A stand-by arrangement will enable Serbia to also get loans from the IMF, but this will require a less generous National Bank of Serbia and domestic budget policy.

The meeting was also attended by Serbian Finance Minister Sinisa Mali and National Bank of Serbia Governor Jorgovanka Tabakovic.