CORRECTED UPDATE 1-Serbia seeks early move on IMF talks-government adviser
(Corrects name in 13th paragraph to Verheijen)
* Will approach the IMF after appointment of new finmin
* World Bank to support Serbia in reforming laws, overhauling state firms
* World Bank says ready to lend $250 mln for 2013 budget (Adds World Bank country manager comments)
BELGRADE, Aug 20 (Reuters) - Serbia, under pressure to stabilise its finances, aims to ask the International Monetary Fund next month to restart talks on a new loan deal crucial for reassuring investors, a government adviser said on Tuesday.
Both the IMF, which last year froze a previous standby loan deal with Serbia, and the country's fiscal advisory body have warned that the government risks missing its revised budget deficit target of 4.7 percent of national output this year.
On top of the rising deficit, Serbia's public debt is seen at 65 percent of gross domestic product (GDP) this year, higher than the IMF recommends for similar emerging economies.
Last month, the Balkan country's outgoing Finance Minister, Mladjan Dinkic, unnerved investors by saying that a new arrangement with the IMF was unrealistic in 2013.
Dinkic was ousted in a cabinet reshuffle and will be replaced by Lazar Krstic, a 29-year old Yale-educated economist. Parliament needs to approve Krstic at a session set for Aug. 26.
"We are waiting for the appointment of the new finance minister, so I believe in September we could formally approach the IMF," Sinisa Mali, an economic adviser to Deputy Prime Minister Aleksandar Vucic, told Reuters.
"This will send investors a message that Serbia is on a reform path and, on the other hand, the government will have to stick to its own reform policies," Mali said.
Serbia has tapped international markets three times since last September and raised $3.25 billion, the equivalent of around 8 percent of GDP. It plans another $1 billion Eurobond in September. Mali said no other issues should be expected in 2013.
Serbia, which emerged from recession in the first quarter, will need to borrow around 5 billion euros ($6.68 billion) to cover the budget gap in 2014.
The World Bank country manager for Serbia, Tony Verheijen, said the bank was ready to provide up to $250 million in budget support this year and the same in 2014.
He said the first $250 million could come by the end of 2013, provided the government adopts the 2014 budget in November and sticks to its plan to reform public companies and stop subsidising 179 loss-making state-owned enterprises.
On top of that, the government would need to make an additional saving amounting to 0.5 percent of GDP, he said.
Verheijen also said the new finance minister Krstic seemed to have strong backing from deputy Prime Minister Vucic, often seen as the most powerful man in Serbia's ruling coalition.
"The other message we've got from that meeting is the government is serious in continuing a reform track," he said after meeting Vucic and Krstic.
Prime Minister Ivica Dacic is expected to formally complete the cabinet revamp early next week and turn to economic reforms, as unemployment has reached more than 25 percent.
His Socialist Party and their partners, the Pensioners Party, have so far opposed any attempt to freeze or cut pensions and public wages.
Unlike them, Vucic's Serbian Progressive Party, the single strongest party in the ruling bloc, said it was ready to enforce painful reforms.
"I guess the relative youth/inexperience in office of the new prospective finance minister would suggest that he might prefer the cushion of an IMF programme," Timothy Ash, Standard Bank analyst, wrote in a note.
A potential deal with the IMF would "provide the external policy anchor to persuade the coalition allies of the need to push through with difficult reforms," he said.
($1 = 0.7490 euros) (Additional reporting by Ivana Sekularac; Editing by Zoran Radosavljevic and Stephen Nisbet)
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