16/10/2020
The official talks between the delegation of the Republic of Serbia and the IMF mission within the fifth and last semi-annual review of Serbia’s performance under the Policy Coordination Instrument (PCI) ended today with a video conference meeting.
At the closing meeting the delegation of the Republic of Serbia was led by NBS Governor Jorgovanka Tabaković, who also serves as the Serbian Governor to the IMF, and the IMF mission was led by Mr Jan Kees Martijn. Finance Minister Siniša Mali and his associates also participated in the talks.
The IMF assessed that the implementation of the PCI-supported programme is on track and that the pandemic-induced economic contraction in Q2 is followed by a recovery which has proved stronger than anticipated as a result of the Serbian authorities’ comprehensive response.
Relative to the WEO October Update, presented during the Annual Meetings of the IMF and the World Bank, the IMF mission significantly increased the projection of Serbia’s economic growth for this year, taking into account the data and developments recorded after the October Update was concluded. They expect Serbia to record dynamic growth in the coming years, and a full recovery from the effects of the pandemic already in 2021. The structural reform agenda needs to be advanced so as to create conditions for faster private sector growth and to reinforce Serbia’s medium-term prospects.
Governor Tabaković emphasized that the NBS has revised its central growth projection for this year from -1.5% to -1.0%, given that the Serbian economy is recovering faster than expected and that some segments of the economy have already reached pre-crisis levels of activity. “At the same, there are upside risks to our projection, meaning that the year-end outcome could be even better than -1.0%, having in mind primarily the large and comprehensive package of monetary and fiscal measures adopted within the shortest time possible“, said the Governor.
In the mission’s view, the monetary and financial measures and the large fiscal package deployed in response to the crisis have played a key role in supporting the Serbian economy.
The IMF concluded that inflation in Serbia has been kept low and that it will stay under the NBS’s control in the period ahead. During the fifth review as well, the IMF mission noted that the NBS responded to the crisis with a whole set of measures – trimming the key policy rate, providing liquidity, prescribing a moratorium on debt payments, and a number of other measures, maintaining thereby the necessary monetary and financial stability.
Governor Tabaković stressed that financial stability in Serbia has been preserved even in conditions of the global economic crisis, that the banking sector is highly liquid, well-capitalised and with the lowest level of NPLs on record (3.5% at end-August 2020).
“The most important thing for me is that at the very start of the crisis we adopted a whole range of measures that preserved the economy and jobs. We have preserved the confidence of our citizens and businesses that we will continue to deliver macroeconomic and financial stability no matter what the conditions are”, underscored the Governor.
Governor’s Office
