World Bank to grant USD 250 million to Serbia

The World Bank will approve a USD 200 million loan for Serbia if the country adopts its 2014 budget in time and if its fiscal consolidation continues, Tanjug news agency cited World Bank Country Manager for Serbia Tony Verheijen as saying.

- In that case, we will give you the additional USD 50 million asked for by Deputy Prime Minister Aleksandar Vucic - said Verheijen.

Verheijen said for the Thursday edition of Politika, a Belgrade-based daily, that last week he and the World Bank regional director had a meeting with Vucic and future Serbian Finance Minister Lazar Krstic and asked them two questions.

- The first question was about whether the budget for 2014 will be adopted in time, so that we could put forward the proposal for the loan at the Bank's Board meeting in December, as we cannot go before them with a budget for this fiscal year - Verheijen said.

Secondly, though the budget revision is a step up in the right direction, we believe more needs to be done to stop public debt growth in the medium term, he added.

In the 2014 budget, we want to see fiscal deficit go down by 0.5 percent against this year's budget revision, which is a reduction of public expenditures by one percent, said the World Bank country manager for Serbia.

He said that it is reasonable to expect that Serbia will get the money in this calendar year.

But we need to see if the government will continue to implement the action plan dealing with the restructuring of enterprises and if the severance pays for those workers are stipulated in the 2014 budget, said Verheijen.

Since Serbia has no arrangements with the International Monetary Fund (IMF), the World Bank has to make its own assessment of the fiscal and macroeconomic situation in the country.