An International Monetary Fund (IMF) mission, led by James Roaf, visited Belgrade during September 19-23, 2016 to initiate discussions on the 2017
budget and discuss policy priorities of the new government. A full mission for the sixth review under Serbia’s precautionary Stand-By Arrangement with
the IMF is planned for the second half of October.
At the conclusion of the visit, Mr. Roaf issued the following statement:
“Serbia’s economic recovery continues to gather speed, supported by improved confidence and strong program performance. Recent employment trends are also
encouraging. The macroeconomic outlook is positive, but risks—domestic and external—remain elevated and structural challenges persist. In this context, the
mission welcomed the government’s renewed commitment to structural reforms to strengthen financial stability, boost potential growth and reduce the still
high unemployment level.
“The mission started discussions with the authorities on fiscal policy for the remainder of 2016 and the key parameters of the 2017 budget, to be concluded
in the October review mission. This discussion comes on the back of strong fiscal results in the last two years. There was agreement on maintaining the
priority of public debt reduction and continuing a gradual fiscal adjustment. Within this framework, consideration will be given to potential uses of space
opened by this fiscal over-performance, including for moderate and targeted increases in public wages and pensions, additional investment in key priority
areas, or other growth-enhancing spending items. Any changes in wages and pensions should take into account the very low inflation environment, which has
helped preserve purchasing power and improve the standards of living, and the need to ensure tight control of current public spending. The mission also
discussed progress on public wage system reform and the status of public sector rightsizing.
“The mission team is grateful for the authorities’ hospitality and close cooperation.”
