Serbia’s GDP grows faster than projected for 2018: IMF

BELGRADE, Oct. 4 (Xinhua) — Serbia’s real GDP growth will, according to latest estimations of the International Monetary Fund (IMF), reach 4.2 percent in 2018, James Roaf, head of the IMF delegation said at a press conference here on Thursday, thus correcting earlier projection by 0.7 percent.
Speaking at the end of the ten-day visit of the IMF team to Serbia, Roaf marked good macroeconomic and fiscal results in 2018, estimating that Serbia’s growth has been accelerated thanks to private consumption and dynamic foreign direct investment, while the general government level is expected to register a surplus of 0.6 percent of GDP, with capital spending exceeding projections.
He revealed that during the visit, the IMF team agreed with Serbian authorities on the policies that need to be implemented in order to complete the first revision of the arrangement under the Policy Coordination Instrument.
Serbia signed a 30-month-long non-financial arrangement with IMF in July this year, when the IMF predicted that the country will achieve a 3.5 percent GDP growth in 2018.
Roaf, however, expressed expectation for the real growth in 2019 to slow down to 3.5 percent, adding that the “full implementation of structural reform programs will additionally positively affect the growth potential”.
Roaf explained that at their meetings the two sides agreed on key parameters of the budget for 2019, which are planning a total fiscal deficit of 0.5 percent of GDP, which would lead to a further reduction of public debt.
This would, according to him, sustain a fiscal discipline, along with creating space for the implementation of growth-enhancing measures, such as an additional increase in public investment and a moderate reduction in the tax burden on labor.
Roaf noted improvement in the labor market conditions, with a significant increase in employment in the formal sector, a fall in unemployment and a steady increase in wages in the private sector.
According to IMF expectations, the overall inflation will remain close to the mid-target range of 3.0 percent during 2018 and 2019, while the public debt should fall below 55 percent of GDP by the end of the year.
Roaf noted progress in the privatization of state enterprises and suggested that options should be considered for resolving the remaining ones.