Ser­bia in talks with IMF for new 1-bil­lion-euro loan

Kathimerini English - - Business & Finance -

Ser­bia is in talks with the In­ter­na­tional Mon­e­tary Fund for a new pre­cau­tion­ary loan agree­ment worth about 1 bil­lion eu­ros ($1.4 bil­lion), Al­bert Jaeger, the Wash­ing­ton-based lender’s mis­sion chief, said yes­ter­day. “The hope is to come back around the sec­ond half of Au­gust and if we can agree on a staff-level agree­ment there will be time to bring the pro­gram to the board in Septem­ber,” Jaeger said be­fore meet­ing Ser­bian Prime Min­is­ter Mirko Cvetkovic. “The pro­gram will prob­a­bly start in Oc­to­ber.” Ser­bia’s econ­omy is emerg­ing from a re­ces­sion with gross do­mes­tic prod­uct pro­jected to grow about 3 per­cent this year, ac­cord­ing to the cen­tral bank. The gov­ern­ment turned to the IMF for 3 bil­lion eu­ros of fi­nan­cial as­sis­tance in 2008 to keep its econ­omy afloat. The talks on a new loan come a month af­ter Ser­bia com­pleted the pre­vi­ous bailout pro­gram with the lender aimed at help­ing the Balkan nation off­set po­ten­tial bal­ance-of-pay­ments prob­lems that loomed af­ter in­vestors fled emerg­ing mar­kets dur­ing the global fi­nan­cial cri­sis. “We have growth, but it’s not fast,” Jaeger said. “The com­po­si­tion of growth is bet­ter than be­fore the cri­sis and it is not ac­com­pa­nied by a large ex­ter­nal cur­rent ac­count gap.” The IMF re­vised its GDP fore­cast down to 4.5 per­cent from 5 per­cent. In a state­ment re­leased af­ter meet­ing with Cvetkovic and his team, the lender said that “Ser­bia’s econ­omy is slowly get­ting back on its feet” with 2012 growth ex­pected to ac­cel­er­ate “as key” for­eign di­rect in­vest­ment “projects come on stream.” More bal­anced growth was ham­pered by weak real in­comes and “mas­sive la­bor shed­ding since the 2008 cri­sis.” With Cvetkovic’s ad­min­is­tra­tion fac­ing elec­tions in less than a year, the IMF ex­pects Ser­bia to keep its 2011 bud­get in line as “monthly deficits are rel­a­tively high,” Jaeger said. Un­der cur­rent poli­cies, Ser­bia’s 2012 bud­get will re­quire some fis­cal ad­just­ments and var­i­ous op­tions are still be­ing dis­cussed, he said. The gov­ern­ment sees this year’s fis­cal gap be­low 4.1 per­cent of eco­nomic out­put. Ser­bia should keep pub­lic wages and pen­sions in line with in­dex­a­tion rules, and the lender said “the mis­sion saw no scope for ad­di­tional pub­lic wage and pen­sion in­creases be­yond the in­dex­a­tion step en­vi­sioned for Oc­to­ber.

(Bloomberg) po­lice had pre­vi­ously told pro­test­ers the square had to be cleared so that clean­ing ser­vices could move in to re­move de­bris. Puig say the square was likely to be a meet­ing place for soc­cer fans dur­ing and af­ter to­day’s Cham­pi­ons League fi­nal be­tween Barcelona and Manch­ester United in Lon­don. trial man­agers more pes­simistic about ex­port or­ders. Most of the eu­ro­zone is en­joy­ing mod­est to strong growth, de­spite debt crises and re­ces­sions in Ire­land, Por­tu­gal and Greece.


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