IMF approves new three-year stand-by arrangement

IMF approves new three-year stand-by arrangement

The arrangement consists of SDR 935.4 million (about EUR 1.2 billion, 200 percent of quota), the institution announced.

The IMF said the program was "based on three main pillars: restoring public finances’ health; increasing the stability and resilience of the financial sector; and implementing comprehensive structural reforms, to form a solid foundation for job creation and return to sustained high growth."

According to earlier announcements by the Serbian government, the three-year arrangement with the IMF does not entail a new loan from the international financial institution for strengthening Serbia's foreign exchange reserves.

This is because "Serbia is solvent enough and does not need a new loan," Tanjug reported.

Through this arrangement, the Serbian government was "practically taking on the obligation to carry out fiscal consolidation and public sector restructuring in keeping with the Law on budget for 2015, i.e. to implement structural measures and measures of macroeconomic stabilization and reduce the deficit by EUR 1.3 to 1.4 billion or 4.25 percent of GDP in the next three years."

The first control of execution of the assumed obligations should be carried out in mid-May when the institution's representatives should come to Belgrade.

The talks with the IMF delegation headed by Chief of the IMF Mission for Serbia Zuzana Murgasova officially began on November 4, 2014 and lasted two weeks.

Over the past 15 years, Serbia had three agreements with the IMF, the stand-by arrangement in the period 2001-2004 and a precautionary arrangement in 2009.

The last arrangement between Serbia and the IMF was signed in late September 2011 and it was frozen the following year because the 2012 budget deviated from the previously agreed fiscal program.