Cvetković to meet with IMF deputy chief

Prime Minister Mirko Cvetkovic will meet today with IMF Deputy Managing Director Murilo Portugal. The meeting will not have any direct link to the evaluation of whether Serbia has met all the conditions set by the IMF for gaining access to the remaining funds envisioned by the two-year arrangement. Cvetkovic to meet with IMF deputy chief That decision will be taken in Belgrade during the IMF delegation’s next visit, expected in August. As things stand right now, Serbia will not be given automatic access to the second tranche of the funds, National Bank of Serbia Governor Radovan Jelasic warns. Jelasic points out that although Serbia undertook the commitment of keeping the budget deficit to a maximum of EUR 214mn by the end of June, the likelihood is that it will end up being considerably in excess of that figure. The governor again raises the question of when the government will be ready to do something about the budget, on either the income or spending side. “The question is what Serbia is ready to do, so to speak, for itself, because revenues are clearly not going as originally planned. A legal commitment—linked to spending, salaries, pensions, transfers—must be honored, and that means creating a bigger budget gap than originally planned,“ he stresses. “Everything that’s done on the income side, it goes without saying, is partially inflationary, and we believe that further measures should be taken on the spending side,“ Jelasic says. The governor says he cannot foresee what conditions the IMF could offer the government should an increased budget deficit be sought, but that, based on the experiences of neighboring countries, the most important question was what that increase would be used for. Mirko Cvetkovic (FoNet, archive)

Cvetković to meet with IMF deputy chief

That decision will be taken in Belgrade during the IMF delegation’s next visit, expected in August.

As things stand right now, Serbia will not be given automatic access to the second tranche of the funds, National Bank of Serbia Governor Radovan Jelašić warns.

Jelašić points out that although Serbia undertook the commitment of keeping the budget deficit to a maximum of EUR 214mn by the end of June, the likelihood is that it will end up being considerably in excess of that figure.

The governor again raises the question of when the government will be ready to do something about the budget, on either the income or spending side.

“The question is what Serbia is ready to do, so to speak, for itself, because revenues are clearly not going as originally planned. A legal commitment—linked to spending, salaries, pensions, transfers—must be honored, and that means creating a bigger budget gap than originally planned,“ he stresses.

“Everything that’s done on the income side, it goes without saying, is partially inflationary, and we believe that further measures should be taken on the spending side,“ Jelašić says.

The governor says he cannot foresee what conditions the IMF could offer the government should an increased budget deficit be sought, but that, based on the experiences of neighboring countries, the most important question was what that increase would be used for.