Serbia has achieved a strong economic recovery, backed by government measures to mitigate the effects of the corona virus pandemic, structural reforms are advancing but important reforms have yet to be implemented, the International Monetary Fund (IMF) mission said today.
The head of the IMF Mission, Jan Case Martin, stated that talks on the budget for 2022, whose deficit should amount to three percent of the gross domestic product, will be completed soon with the representatives of the authorities in Serbia.
As he pointed out, estimates are that GDP growth will be 6.5 percent this year, and 4.5 percent next year. Also, forecasts are that inflation, which was 5.7 percent on an annual level in September, will return within the target frame of three percent in 2022, with a deviation of plus or minus 1.5 percent.
“Rising energy prices on the international market are a risk to inflation and economic growth. The current system of partially regulated energy prices in Serbia helps address the immediate negative impact of these prices on households. Possible measures to mitigate the negative long-term effects of sudden increases in energy prices on businesses should be time-limited and extensive, transparent and non-discriminatory, based on objective criteria, “Martein said.
The IMF mission recommended that Serbia take measures that contribute to energy efficiency.
It is recommended that the increase in salaries in the public sector be limited, and the increase in pensions in accordance with the existing formula that takes into account GDP growth and inflation.
The IMF mission praised Serbia’s progress in fiscal reporting, state aid control and fiscal risk management and state aid control, as well as in the privatization of Petrohemija.
The IMF Executive Board should approve the first revision of the arrangement with Serbia in December this year, which has been in force since June and will last for 30 months.