BELGRADE Dec 6 The World Bank will approve a
total $800 million to Serbia over the next two years for budget
support, investments and reforms, the Tanjug news agency
reported on Thursday citing the lender's country representative.
The Serbian economy will contract this year to about two
percent of gross domestic product (GDP) on declining trade and
investment from the crisis-hit euro zone and a harvest hit by
drought as most of the Western Balkans.
The country expects public debt to peak in 2013 at 65.2
percent of GDP and its revised budget deficit this year is seen
at around 6.2 percent of GDP. Inflation, spurred by food prices
and an increase of value-added tax rose to 12.9 percent in
"The World Bank will in 2013 approve $300 million for the
budget and $150 million for projects," Loup Brefort, the World
Bank's country resident representative was quoted as saying by
The lender is also ready to approve another $200 million as
budget backing for 2014 and another $150 for investments,
Since the ouster of late strongman Slobodan Milosevic in
2000, the World Bank has disbursed a total of about $2 billion
to the Balkan country.
Last week the Serb parliament adopted the 2013 budget,
setting a deficit target of about 3.3 percent and a growth
target of 2 percent.
The Serbian nationalist-Socialist government is also seeking
a fresh three-year precautionary deal with the International
Monetary Fund and talks are tentatively expected early next
The IMF froze its previous 1-billion euro ($1.31 billion)
standby loan deal with Belgrade earlier this year due to broken
spending and borrowing promises.
It said that Serbia's 2013 spending plans are overly
optimistic and the World Bank has forecast more modest growth in
2013 at 1.5 percent.
Serbia's 2013 borrowing plans include a $2 billion Eurobond
and a 500 million euro loan for small and medium-sized firms
from the Luxembourg-based European Investment Bank. It has also
sought $2.8 billion in sovereign loans from Russia and China.
($1 = 0.7652 euros)
(Reporting by Aleksandar Vasovic; Editing by Ron Askew)