Posted By Global Banking and Finance Review
Posted on June 11, 2025
BELGRADE (Reuters) -The International Monetary Fund (IMF) and Serbia have reached staff-level agreement on the first review under a 36-month arrangement to help support economic reforms, the fund said in a statement on Wednesday.
The so-called Policy Coordination Instrument (PCI) was signed in October to make it easier for the Balkan country to secure lending from other sources.
Under the arrangement, Serbian authorities are committed to a fiscal deficit limit of 3% of gross domestic product over three years.
The review will be subject to approval by the IMF Executive Board, the fund said in the statement which was issued after its two-week trip to Serbia.
It also warned that downside risks for the economy were elevated.
The IMF said political tensions over anti-government protests and blockades of state universities launched last November "may weigh on confidence".
Serbia has seen months of anti-government rallies after 16 deaths from a railway station roof collapse triggered accusations of widespread corruption and negligence.
The IMF warned that a global growth slowdown and increasing "geoeconomic fragmentation could negatively affect exports and foreign direct investment".
However, it expects Serbia's economy to grow 3% this year and 4% in 2026.
"Serbia has built up substantial buffers to respond to shocks — foreign exchange reserves and government deposits are high, public debt is declining, and banks are well-capitalised and liquid," the IMF said.
(Reporting by Ivana Sekularac, editing by Ed Osmond)