The Board of Directors of the International Monetary Fund (IMF) carried out the first review of Serbia's precautionary arrangement with the IMF on Friday (26 June 2015) and assessed it was going as planned for the most part.
The precautionary arrangement approved on February 23rd, under which a loan of EUR 1.2 billion will be granted to Serbia, is mostly going as planned, the IMF said, adding that all previous criteria and objectives by the end of March were met.
After the first review, Serbia will have at its disposal 304 million Special Drawing Rights (SDR), the IMF said in a statement to Tanjug news agency.
Structural measures were implemented with delay and difficulties, primarily with regard to state-owned enterprises. Efforts to carry out structural reforms and resume fiscal consolidation are key elements of macroeconomic stability and sustainable long-term economic growth, the IMF assessed.
Steps are taken to adopt the plan for financial restructuring of the Electric Power Company of Serbia (EPS), introduce excise tax on electric energy and increase the electricity tariff, which was done in early June.
An amendment to the Law on Local Self-Government Funding proposed in late June is postponed for late September, and the new goals are set in regard to the problem of non-performing loans, the IMF concluded.
The IMF's release reads that the Serbian economy is slowly recovering from the 2014 recession, benefiting from low prices of oil and economic recovery of the eurozone, which are all factors that have propped up the short-term effects of fiscal consolidation.
However, positive economic growth is not expected before 2016, the IMF noted, stressing that inflationary pressures were low given the low import rates and increased gap between potential and real economic growth.