Serbian Prime Minister Mirko Cvetkovic said he’s “very optimistic” that an International Monetary Fund mission will be completed by Nov. 18 to ensure the next installment of the Balkan nation’s bailout loan.
The government will submit required documentation on rebalancing this year’s state budget, the preparation of a budget for next year and the completion of pension-law issues, he said in an interview in Prague today.
“All of that is prepared and I’m very optimistic it will all be done so that on the 18th the mission will formally be completed and the letter of intent signed,” Cvetkovic said.
Serbia is struggling to emerge from its first recession since 1999, when a NATO bombing, aimed at forcing the country’s troops to withdraw from Kosovo, destroyed most of its infrastructure. The government relies on a 3 billion-euro ($4.1 billion) IMF loan to support its balance of payments.
The government is searching for ways to reduce spending and boost tax collection without cutting too many popular social benefits as it brings the economy into line with European Union norms.
“The deficit next year will be around 4 percent of gross domestic product, when we are talking about the so-called consolidated budget, which includes all public sectors,” Cvetkovic said.
The Serbian dinar gained as much as 0.5 percent to the euro, reversing a decline from the previous day, to trade at 106.86 to Europe’s common currency as of 11:25 a.m. in Belgrade.
The former communist countries of Europe and central Asia are recovering from their deepest recessions since switching to free-market policies, after cheap credit helped growth average 5 percent annually in the years before the credit crunch. The IMF provided more than $70 billion of loans to the region during the global financial crisis, making it the largest recipient of bailouts.
Serbia, Hungary, Latvia, Ukraine and Romania all received loans as they struggled to refinance debt, often denominated in foreign currencies. The region received more than $100 billion in total, including aid from the European Union and World Bank.