Preparing for a global economic slowdown
Overview:
The government has a number of achievements to its name. It has accelerated EU integration, secured two IMF programs (one completed and the second just approved) and won an improvement in Serbia’s sovereign credit rating. Many structural reforms, though, have not been implemented. Public sector employment has not been reduced, progress on privatization has been slow and bureaucracy and corruption are still widespread. Moreover, voters are unhappy that unemployment has risen sharply and that the value of wages has dropped. Just as growth was finally starting to return the authorities must now prepare for the effects of a second global economic slowdown. Adherence to fiscal rules ahead of parliamentary elections in April will be important for retaining investor confidence.