September 24, 2018 / 10:35 AM / in 3 months

Serbia, IMF begin review of advice and monitoring arrangement

BELGRADE, Sept 24 (Reuters) - An International Monetary Fund mission began 10 days of talks with Serbian officials on Monday to review progress on its new non-financial arrangement with Belgrade, the central bank said.

In June, Serbia and the Washington-based lender agreed on a 30-month arrangement under which the fund offers advice and monitoring for countries that do not need financial support. The arrangement will give investors greater confidence in putting their money in Serbia.

In a statement, the central bank said Serbian and IMF officials will focus on: “how to speed up ... structural reforms that should contribute to an increase of productivity, employment in the private sector and achieving of high and sustainable (economic) growth rates.”

Serbia’s economy grew 4.8 percent in the second quarter, up from 4.6 percent in the previous quarter.

Last month, the central bank raised its growth forecast for 2018 by 50 basis points to 4 percent citing better-than-expected performance in construction, agriculture and investment.

The IMF estimated Serbia’s economic growth this year at 3.5 percent.

Serbia in February ended a previous three-year 1.2 billion euro ($1.41 billion) loan deal with the IMF under which the Balkan country cut public sector wages and pensions to reduce its deficit and debt. It did not draw on any of the funds.

Serbia plans to reverse pensions cuts by the end of the year on the back of a budget surplus in 2017 and also expected this year. The country’s public debt was equivalent to 59.6 percent of its annual economic output as of the end of July. ($1 = 0.8496 euros) (Reporting by Aleksandar Vasovic; Editing by Hugh Lawson)

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