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Spring Meetings of the IMF and the World Bank Group - Serbia confirms its willingness and determination to continue to grow stronger and progress further

During the Spring Meetings of the International Monetary Fund (IMF) and the World Bank Group in Washington D.C., the Serbian delegation, led by Governor of the National Bank of Serbia (NBS) Jorgovanka Tabaković, met Mr Tao Zhang, the IMF Deputy Managing Director. Meetings were also held with IMF European Department Director Poul Thomsen, the IMF team for Serbia and representatives of a large number of investors.

By analysing the results achieved in the prior period and the implementation of the new arrangement in the form of the Policy Coordination Instrument (PCI), Mr Zhang assessed that Serbia is fully committed to the implementation of reforms and that the IMF will continue to provide full support to the key reforms in Serbia. He added that Serbia demonstrated unambiguously its strong willingness and determination to strengthening and further progress.

Governor Tabaković particularly highlighted that the prior five-year period saw significant results in terms of the strengthening of Serbia’s macroeconomic stability and outlook for the domestic economy, in an environment of full coordination of policies. Inflation has been kept at a low level, the current account deficit halved, the country risk premium significantly reduced and the credit rating upgraded. Strong fiscal adjustment enabled a faster than expected fall in the public debt share in GDP – to about 50%.

During the meeting, the results achieved within the new investment cycle were summed up, measured by fixed investment growth of around 30%, led by investment of the private and government sectors, and a halved unemployment rate.

At the meeting with the IMF European Department Director and the IMF team for Serbia, it was assessed that the current arrangement with the IMF – which does not have a financial component and aims at preserving the results achieved – marks the continuation of Serbia’s good cooperation with the IMF. A focus was also placed on the activities undertaken in order to facilitate doing business and to place emphasis on financial services consumers and their needs – from the functioning of instant payments, through facial recognition payments, to the strengthening of transparency of financial services. The robust growth in dinar savings was positively assessed – savings rose by close to 25% in 2018, and are continuing up this year.

In addition, Serbia was recognised as the leading country in terms of the resolution of non-performing loans, whose share fell to 5.7% in December last year.

It was concluded that stability and favourable growth prospects of the domestic economy underpin investors’ long-term interest in Serbia, confirming the results achieved in improving the domestic business environment and progress on global competitiveness lists. That the Serbian economy is more stable and that its prospects have improved is also confirmed by the inflow of foreign direct investment of around 7.5% of GDP last year.

There was also talk about the challenges which dominantly arise from the international environment and which were discussed in detail at all levels during the Spring Meetings. In light of these challenges, it is significant that the prior period was used to lay the foundations for sustainable economic growth, in order to press on with reforms for inclusive growth.

Governor’s Office