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The Government of the Republic of Serbia

In the service of citizens

IMF makes decision on successful completion of sixth arrangement revision

Belgrade, 17 December 2016

The National Bank of Serbia has announced that the IMF Executive Board yesterday made a decision on the successful completion of the sixth revision of the current stand-by arrangement with Serbia, with the reminder that this arrangement is still treated as a precautionary arrangement.

The statement says that according to the estimates of the IMF, Serbia continues to achieve good results in the implementation of the agreed economic programme.

The strengthening of the economy, the improvement of public finances and reduce structural weaknesses are continued.

The IMF points out that Serbia is recording employment growth, that inflation is under control, and that the public debt began to drop.

For further successful implementation of the programme it is necessary to continue the reform process that will lead to further improvement of the business climate and economic growth in the medium term.

In the area of fiscal policy, the priorities are to eliminate delays, the reform of the administration and control of salaries in the public sector, while strengthening public investment management.

The IMF points out that it is necessary to restructure the remaining state-owned enterprises.

The lowering of the inflation target followed as a result of improved macroeconomic developments and market confidence, which will affect the further strengthening if the dinar and the reducing of long-term interest rates. The IMF believes that the current prudent and flexible monetary policy is in line with the new inflation target.

The IMF stressed that the implementation of reforms in the financial sector creates conditions for improving its resistance, while the implementation of the Strategy for resolving problem loans gives results in reducing the share of problem loans.

Serbia has done a lot on improving the business environment, but still needs to work on increasing investor confidence, in order to achieve medium-term growth potential, it is said in the statement.