17.12.2025.

IMF: Successful conclusion of the second review under PCI. Owing to its strong record of macroeconomic management, Serbia has built buffers helping it navigate a challenging environment

At its meeting of 17 December, the IMF Executive Board made a decision on the successful conclusion of the second review of implementation of the economic programme under the Policy Coordination Instrument (PCI).

In its statement, the IMF Executive Board noted the following:

•  Within the PCI framework, the authorities are implementing key structural reforms and have successfully completed the second review of the programme.
•  Prudent macroeconomic policies, supported by strong cooperation with the IMF, along with robust buffers, are helping Serbia navigate this challenging period. A high level of FX reserves, substantial government deposits, as well as a resilient and well capitalised banking sector are an important support in addressing current challenges. Resolving the issue of sanctions against the Oil Company of Serbia (NIS) would further reduce uncertainty.
•  Fiscal discipline is being strictly maintained and monetary policy remains cautious, preserving the credibility of economic policies.
•  Economic activity has slowed due to heightened domestic and external challenges. Following real GDP growth of around 2% in 2025, an acceleration to 3% is expected in 2026, and further to 4.6% in 2027.
•  Inflation has been reduced to below the NBS target midpoint of 3%. The NBS continues to pursue appropriate monetary policy.
•  The continuation of prudent policies is essential to maintain policy credibility going forward. The fiscal deficit is expected to remain below the agreed limit of 3% of GDP, which is a key programme anchor. This will be supported by controlled current expenditure, strict adherence to fiscal rules for public sector wages and pensions, and careful investment prioritisation. Such discipline will help maintain fiscal space to respond to shocks and support a further reduction in public debt.

“Like previous ones, this IMF’s assessment – that Serbia is pursuing sound economic policy which helped us build up significant buffers – is an additional confirmation of our good governance amid shocks. The buffers we have built are a guarantee of stability in a period of pronounced global uncertainty. We have secured and maintained a relatively stable dinar euro exchange rate, as well as the country’s record high FX reserves. We have also significantly increased our gold reserves, which now constitute around 20% of our FX reserves. The banking sector is stable and highly capitalised, and the share of NPLs is at a minimum. The IMF’s assessment that monetary policy is appropriate and the banking sector strong, that the continuation of cautious monetary policy and a resilient financial sector will remain an important anchor in a period of heightened uncertainty, including the projected path of inflation which will remain within the NBS target tolerance band – are yet another confirmation that the NBS is conducting sound monetary and prudential policies. This, of course, is done in coordination with other policies and stakeholders in our ecosystem”, concluded Governor Tabaković.

(The Policy Coordination Instrument was approved to the Republic of Serbia on 9 December 2024 for a period of 36 months. It is advisory in nature and does not involve the use of financial resources. It is approved to countries that are implementing credible economic policies. Performance under the programme is monitored within regular semi-annual reviews.)
 

Governor's Office