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The Government of the Republic of Serbia

In the service of citizens

IMF welcomes Serbia’s macroeconomic stability

Belgrade, 22 September 2004

Serbian Deputy Prime Minister Miroljub Labus said that the International Monetary Fund’s delegation, on a visit to Belgrade, were pleasantly surprised by Serbia’s achievements in the field of macroeconomic stability.

Miroljub Labus

Labus told the national TV station RTS late on Tuesday that Serbia’s only problem is a foreign trade gap, and explained that the country’s balance of payments deficit reached $1.7 in the first seven months of this year, or twice as much as in the same period of 2003.

Labus said the IMF has proposed a devaluation of the dinar as a possible solution to the balance of payments deficit, but he ruled it out because such as move could obstruct the Serbian government’s economic plan.

According to him, the only solution is to boost export-oriented output. He also said that Serbia’s gross domestic product could grow by as much as 8-9.5% by the end of the year.

Thanks to an agreement with the IMF, said Labus, the budget deficit will remain around 30 billion dinars plus a further 2 billion dinars due to be paid to the London Club of creditors.

Labus said that next year Serbia must set aside about 21 billion dinars to service its external and internal debts. He explained that this means that a good number of local firms will be deprived of state subsidies. Receipts from privatisations of large public enterprises will also help repay the sovereign debt, he added.