IMF and Serbia: Navigating Economic Reform Amidst Political Tensions
The IMF and Serbia have reached an agreement under a 36-month arrangement aiding economic reforms. Setting a 3% GDP fiscal deficit, the agreement awaits IMF Executive Board approval. Political unrest and potential global economic slowdowns pose risks, yet Serbia maintains robust financial buffers and anticipates economic growth.
- Country:
- Serbia
The International Monetary Fund (IMF) and Serbia have reached a consensus on the first review under a 36-month arrangement aimed at bolstering Serbia's economic reforms. The Policy Coordination Instrument (PCI), signed in October, is designed to facilitate lending opportunities for Serbia from various financial sources.
Under this arrangement, the Serbian government has committed to maintaining a fiscal deficit limit of 3% of GDP over a three-year span. This review is pending approval from the IMF Executive Board, following a recent two-week assessment trip to Serbia.
Despite signs of growth, the IMF has highlighted elevated risks tied to political tensions, resulting from anti-government protests ignited by a tragic railway station accident. Additionally, potential global economic slowdowns and increased "geoeconomic fragmentation" threaten Serbia's export and investment landscape, even as the nation strengthens its financial resilience.
(With inputs from agencies.)
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