MAT: Arrangement with IMF to bring benefits

BELGRADE - The new arrangement with the International Monetary Fund (IMF), which is being negotiated presently, will result in an increase in Serbia's economic policy credibility and enable monitoring of the reform process, Serbian economic experts said on Friday.

Vladimir Vuckovic, Stojan Stamenkovic and Miladin Kovacevic, editors of the monthly magazine Macroeconomic Analyses and Trends (MAT), said at the presentation of the magazine's new issue that the signing of a new arrangement would ensure better control of the operation of public enterprises and the possibility of refinancing of loans, whose maturity date is in 2017.

Vuckovic said that he expects the new arrangement with the IMF will contribute to an increase in credibility of the domestic economic policy, lower interest rates for future loans and greater inflow of foreign direct investment.

Moreover, the arrangement will result in greater control of the operation of public enterprises and other state-owned companies, and also monitoring of the reform process, in order to prevent the country from abandoning its current course and the process of rationalization in the public sector due to social and political circumstances, Vuckovic said.

Kovacevic said that the arrangement with the IMF is particularly important, because it will create possibilities for better control of the public debt.

Fiscal consolidation will stop the increase of the public debt, but it would not stop being a burden and extra efforts will be needed to partially refinance the public debt, he said.

Kovacevic explained that the expensive loans that will mature in 2017 should be refinanced with cheaper loans with longer reimbursement periods.

Stamenkovic believes...