IMF: Salary and pension increases out of question

The International Monetary Fund (IMF) will further upgrade its 2016 GDP growth forecast for Serbia.

Source: Tanjug
Roaf (2nd R) is seen during a previous visit to Belgrade (Tanjug, file)
Roaf (2nd R) is seen during a previous visit to Belgrade (Tanjug, file)

It had already been revised in April from 1.75 pct to 1.8 pct, IMF Mission Chief for Serbia James Roaf said ahead of Thursday's start of an IMF mission.

"We are witnessing a very welcome acceleration of growth in Q1, including strong exports and investments, which reflects a growing confidence as a result of the economic programme," Roaf told Belgrade's NIN weekly, according to Tanjug.

That is why we will upgrade our overall 2016 forecast during the mission but I am still not certain whether it will be as high as 2.5 pct, he said.

"The fiscal situation in Serbia is better than forecast and the 2015 budget deficit is lower than expected but past debts and other factors have resulted in smaller success in terms of achieving the end-goal of cutting the high public debt, which the IMF expects to reach nearly 80 pct of GDP at the end of this year," Roaf said.

An improvement of the fiscal situation should be no justification for a delay in structural reforms, he said.

A salary and pension increase in 2016 is out of the question due to a delay in public sector rightsizing, and the IMF sees no room for an increase in 2017 either, Roaf also said.

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