Serbia: The outline of a new IMF program
Overview:
An IMF Mission is due in the second half of August to continue negotiations on a new Stand-By Arrangement (SBA). This SBA would be of 18-months duration and would be worth EUR1 bn although the Serbian authorities intend to treat the new program as precautionary. If everything goes to plan, the new SBA could be approved by the Executive Board of the IMF by September. The most obvious need for a new program is that parliamentary elections approach next spring and Serbia has a history of significant fiscal slippage around election time. Moreover, the fiscal deficit should actually be tightened next year as growth recovers in order to keep public debt at financable levels. However, there are also a number of other reforms which must be implemented to make the Serbian economy more competitive.