New Arrangement with the IMF to Accelerate Sustainable Growth
The Serbian delegation led by NBS Governor Jorgovanka Tabaković met with IMF Deputy Managing Director Tao Zhang within the framework of the Annual Meetings of the IMF and World Bank Group in Indonesia.
The meeting with Mr Zhang focused on the results Serbia has achieved, current macroeconomic developments and the implementation of the new economic programme supported by the Policy Coordination Instrument.
The Serbian delegation highlighted that the prior period was marked by strengthened macroeconomic stability and improved outlook, in an environment of structural reforms and full coordination between monetary and fiscal policies. This is reflected in GDP growth of 4.9% y-o-y in the first half of the year, supported by a vigorous rise in private and government investment. A favourable economic outlook stimulated long-term investment appetite, reflecting the improvement of the domestic business climate and progress on global competitiveness lists.
Inflation has been preserved at a low level, the country risk premium is at its lowest, the country’s credit rating is favourable, and fiscal stabilisation has ensured a much faster than expected reduction in public debt. It was concluded that all the results achieved serve as the best guarantee that growth in employment and the standard of living will continue in the coming period. In the field of financial sector reforms, the NPL share in total loans fell to 6.5%, down by over two thirds from the start of implementation of the NPL Resolution Strategy.
Mr Zhang commended the results achieved by the Republic of Serbia, expressing the IMF’s intention to continue to fully support the key reforms in Serbia. He said Serbia availed of euro area growth to expand its trade relations, while at the same time achieving and maintaining fiscal stability and ensuring quality support to economic growth. Finally, the participants concluded that political stability is an important pillar of overall macroeconomic and financial stability of the country, underpinning sustainable economic growth.