IMF: Good fiscal results, salaries to be discussed

In the first half of 2015, Serbia has recorded good fiscal results and a deficit below the projected level, IMF mission head James Roaf said on Tuesday.

Source: Tanjug

The deficit, which is lower than projected, was achieved mainly through stepping up revenue collection, Roaf said at a press conference on the occasion of the second review of the three-year precautionary arrangement between Serbia and the IMF.

He said that one of the reasons why the deficit is lower than expected is that the public investments were lower than projected, which is not welcome.

In the respective period, the investments in Serbia were less than expected, Roaf said, stressing that it is obvious that there is determination to solve problems that the country has been facing for many years to date.

Roaf expressed satisfaction that there is more discipline in tax collection and other payments in the public sector, stressing that in the forthcoming period, the government needs to step up the implementation of reforms in the sector of state-owned, public companies, among other things by means of privatization, restructuring and bankruptcy

Discussions with the Serbian government about an increase of salaries and pensions will take place in November, Roaf announced on Tuesday.

There is not much I can say, Roaf told the press conference, adding that the matter will be discussed in November to see if there is a possibility to fit the increase into the 2016 framework.

Permanent fiscal increases are evident, but the matter of increasing salaries and pensions is coexistent with the general objective of consolidating the budget deficit and reducing the public debt, he said.

The debt is expected to continue to grow for another year and a half and start declining no earlier than in 2017, Roaf explained, adding that, for that reason, he cannot talk about percentages, but that he can talk about the approach to the matter of a salary and pension increase.

When we return in November, we will assess the 2016 budget and all revenue collection-related trends in the economy - based on that, we and government will decide on how much room there is for an easing regarding salaries and pensions, and a potential increase of earnings should be selective and targeted, Roaf said.

According to him, the IMF has revised the highest projection of Serbia's GDP growth to 0.5 percent and expects the growth to accelerate over the medium term.

This, of course, will depend on further healthy moves in the macroeconomic policy and on intensifying structural reforms that will improve the way the economy is working, Roaf said.

Commenting on the second review of a three-year arrangement with Serbia, Roaf told the press conference that the IMF program in Serbia is producing good results.

"There was a fear that this year's major fiscal belt-tightening would be damaging to growth, but, instead, we have seen growth as well as an increase in employment and a decrease in unemployment," he said.

The inflation level in Serbia has remained the same and the foreign exchange rate is stable, Roaf noted.

He said that an agreement has been reached regarding the review of the stand-by arrangement with Serbia, which is now to be approved by the IMF top management and executive board.

The IMF board of governors will meet in mid-October, he said, adding that all details related to policies agreed will subsequently be released on the IMF website.

"Talks successful, results good, economy growing"

Serbia's Finance Minister Dusan Vujovic said Tuesday that talks with the International Monetary Fund (IMF) had been completed successfully and the results were good and the economy was growing.

"These results are fruit of the work of the government and the prime minister. We have come all the way from the almost probable bankruptcy to a well-regulated financial system and improvement concerning fiscal deficit, and from the threatening recession to positive economic growth," Vujovic said at a joint press conference with IMF officials.

He added that we were turning a new page today, heading for new tasks, the greatest of them being structural reforms.

"The country of the 20th century is behind us, and we need a country for the 21st century," the finance minister said.


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