IMF conditions "not too restrictive"

Economic analysts believe that the International Monetary Fund (IMF) did not impose overly restrictive conditions on Serbia, Tanjug says. They agreed that the solutions reached in the talks between Serbian officials and a visiting IMF mission, regarding the second and third installment of a USD 2.9bn standby arrangement, could be implemented in 2010, although some feel that the money coming from the IMF leads to the postponement of reforms and necessary changes in the country. IMF conditions "not too restrictive" Economist Miladin Kovacevic said that the results of the negotiations with the IMF showed that the institution had plenty of understanding for the economic and social situation in Serbia. Kovacevic told Tanjug that the IMF had not imposed too harsh conditions on Serbia, especially in terms of the budget, because they had taken into account the modest economic growth planned for 2010. Economist Goran Nikolic stated that keeping salaries and pensions at the current level throughout 2010 would reduce them by seven percent in reality, because the inflation would also reach that level. A budget deficit of four percent of GDP is sustainable, because there was an increase in budget revenues in the third quarter of 2009, and 2010 will probably see their considerable growth, Nikolic said. Economist Miroslav Prokopijevic feels that the money from the IMF will delay reforms and necessary changes in Serbia. According to him, Serbia will either have to get new funds after it has spent the ones from current IMF, World Bank, EBRD, Chinese and Russian credits or sell some of its property. He said it was problematic that Serbia was spending more than it produced, which could not be sustained in the long run. Commenting on the announced budget deficit of four percent of GDP, Prokopijevic remarked that from the long-term point of view, the budget deficit could not be maintained above the growth rate, but that it could be tolerated for a year, two, or possibly three. According to him, enormous public spending, which amounts to almost a half of the national income, is a far bigger problem than the budget deficit, and the IMF did not insist on it at all.

IMF conditions "not too restrictive"

Economist Miladin Kovačević said that the results of the negotiations with the IMF showed that the institution had plenty of understanding for the economic and social situation in Serbia.

Kovačević told Tanjug that the IMF had not imposed too harsh conditions on Serbia, especially in terms of the budget, because they had taken into account the modest economic growth planned for 2010.

Economist Goran Nikolić stated that keeping salaries and pensions at the current level throughout 2010 would reduce them by seven percent in reality, because the inflation would also reach that level.

A budget deficit of four percent of GDP is sustainable, because there was an increase in budget revenues in the third quarter of 2009, and 2010 will probably see their considerable growth, Nikolić said.

Economist Miroslav Prokopijević feels that the money from the IMF will delay reforms and necessary changes in Serbia.

According to him, Serbia will either have to get new funds after it has spent the ones from current IMF, World Bank, EBRD, Chinese and Russian credits or sell some of its property.

He said it was problematic that Serbia was spending more than it produced, which could not be sustained in the long run.

Commenting on the announced budget deficit of four percent of GDP, Prokopijević remarked that from the long-term point of view, the budget deficit could not be maintained above the growth rate, but that it could be tolerated for a year, two, or possibly three.

According to him, enormous public spending, which amounts to almost a half of the national income, is a far bigger problem than the budget deficit, and the IMF did not insist on it at all.