Republic of Serbia: 2023 Article IV Consultation, First Review Under the Stand-By Arrangement, and Request for Modification of Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director for Republic of Serbia

July 5, 2023

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Republic of Serbia: 2023 Article IV Consultation, First Review Under the Stand-By Arrangement, and Request for Modification of Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director for Republic of Serbia, (USA: International Monetary Fund, 2023) accessed October 6, 2024

Summary

Serbia has made impressive economic gains over much of the past decade: living standards improved, inflation fell, public finances were strengthened, and reserves increased, helped by ample foreign direct investment (FDI) inflows. But spillovers from the war in Ukraine—especially the sharp increase in international energy prices—and deep-rooted problems in Serbia’s energy sector that came to a head last year, led to large external and fiscal financing needs, prompting the authorities to request a Fund-supported Stand-By Arrangement (SBA). Fiscal and external outturns for 2022 were both better than expected, and unemployment remains low. Record FDI inflows continue to drive reserves higher. But inflation remains a pressing challenge. Led by high food and energy prices, headline inflation is now well above the National Bank of Serbia’s (NBS’s) target band and core inflation has also increased sharply. Fiscal policy is expected to remain relatively tight in 2023, despite additional mid-year spending measures. Deep structural problems persist in the energy sector and are a key focus of the SBA. Long-standing geopolitical challenges remain.

Subject: Economic and financial statistics, Economic sectors, Energy sector, Financial institutions, Government finance statistics, Inflation, International organization, Loans, Monetary policy, Prices, Public debt

Keywords: A. monetary policy, Budget financing, Energy sector, Europe, Food price inflation, Global, Government finance statistics, Inflation, Inflation dynamics, Inflation expectation, Loans, Precautionary Stand-By Arrangement, Rate hike, SBA approval

Publication Details

Pages:

136
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2023/243
Stock No:

1SRBEA2023001
ISBN:

9798400248177
ISSN:

1934-7685

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