IMF: Unemployment, public debt, budget deficit problems

IMF: Unemployment, public debt, budget deficit problems

BELGRADE -- IMF Mission to Serbia head Zuzana Murgasova said on Thursday that the international financial institution reached an agreement with the Serbian government.

It concerns a new three-year precautionary arrangement of around EUR 1 billion.

At the closing press conference following the official talks that ran from November 4 to 20, the officials said that the new arrangement should be approved by the IMF board of executive directors, and is due to come into effect on January 1, 2015.

Murgasova said that a high unemployment rate, public debt and budget deficit remain the challenges facing the Serbian government.

Serbia needs to implement certain economic recovery measures that will secure macroeconomic stability, job creation, fiscal consolidation, which should halt a rise in the country's public debt, Murgasova said.

The fiscal consolidation measures are aimed at reducing the public spending, total expenditures for public sector salaries and pensions, and budget expenditures for public companies.

The accompanying structural reforms should facilitate job creation, public debt reduction, and the fiscal consolidation measures should curb the high public spending, primarily in the public sector which is a budget beneficiary, while at the same time looking after the most vulnerable population, she noted.

The fiscal adjustment should enable a relaxation of the monetary policy, if external conditions allow for that. That would enable a drop in interest rates, Murgasova said.

Governor of the National Bank of Serbia (NBS) Jorgovanka Tabaković said that on its part, the NBS will contribute to boosting the...