Serbia Says IMF Clears 1 Billion-Euro Precautionary Loan Program
The new program “books” 1 billion euros that Serbia “can use in the case of crisis or big problems,” Cvetkovic was cited by Beta news agency as saying. The IMF office in Belgrade confirmed that the loan was cleared.
Serbia sought the so-called precautionary loan program to shield it from external shocks, while anchoring fiscal policies and boosting investor confidence.
To qualify for the program, Serbia’s government adopted a revised 2011 budget that caps this year’s fiscal deficit target at 4.5 percent of economic output and sets a limit on cash for refunding property seized by Communists seven decades ago to about 6 percent of the nation’s gross domestic product.
The new loan was agreed upon less than five months after the Balkan nation completed a 3 billion-euro credit that helped it weather the global financial crisis, which sparked a recession. Serbia used about half the loan and even with the ongoing economic slowdown in its main trading partners and the euro area debt crisis, the government said it doesn’t plan to draw funds from the new agreement.
The Washington-based lender has already revised down its 2011 economic-growth forecast for Serbia to 2 percent from 3 percent, and to 3 percent next year from 4.5 percent.
Slower economic output, already seen in revenue collections, led the IMF to approve an increase in the fiscal gap to 3.9 percent of gross domestic product next year, compared with a previous estimate of 3.2 percent.
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