February 22, 2018 / 10:26 AM / in 4 months

Serbia completes 3-year loan deal, IMF urges more reforms

BELGRADE, Feb 22 (Reuters) - Serbia has successfully completed a three-year programme with the International Monetary Fund, but must improve its business climate and ailing infrastructure to catch up with Western European peers, the Fund said on Thursday.

The deal, signed in February 2015, committed Serbia to a series of measures to reduce public debt and the budget deficit, including making cuts to public sector wages and pensions.

The Fund said the programme has helped turn the economy around and made it more attractive to investors.

“The fiscal accounts, with the second-largest deficit in Europe in 2014, boasted a surplus in 2017,” the statement said. “Economic confidence has improved with stronger investment both from foreign and domestic sources.”

But the Fund said Serbia, which aspires to join the European Union by 2025, must maintain the pace of reforms.

It said Belgrade should reform institutions to support private-sector-led growth and modernise tax administration. It should also improve the business climate to attract investors, and invest in the road, telecommunications and energy networks.

Serbian Finance Minister Dusan Vujovic said last month that Belgrade would seek an agreement for some form of cooperation with the IMF after the three-year deal expires, but added that the cooperation would not involve money. (Reporting by Ivana Sekularac; Editing by Tom Balmforth)

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