IMF Tentatively Agrees To Provide $2.4Bln Loan To Serbia

IMF Tentatively Agrees to Provide $2.4Bln Loan to Serbia

The International Monetary Fund said on Wednesday it has tentatively agreed to provide a $2.4 billion loan to Serbia

WASHINGTON (Pakistan Point News / Sputnik - 02nd November, 2022) The International Monetary Fund said on Wednesday it has tentatively agreed to provide a $2.4 billion loan to Serbia.

"I am pleased to announce that the IMF team and the Serbian authorities have reached staff-level agreement on a 24-month Stand-By Arrangement (SBA) with access amounting to SDR 1.9 billion, equivalent to about EUR 2.4 billion," IMF Head of Mission to Serbia Jan Kees Martijn said in a press release. "This arrangement would help address emerging external and fiscal financing needs given the challenging global economic environment and support the authorities' macroeconomic policies and structural reform efforts, with a focus on the energy sector."

Martijn noted that Serbia was facing the fallout from regional and global challenges, including the Russia-Ukraine conflict. GDP growth is predicted to slow to about 2.5% this year and 2.25 next year because of weaker demand from EU trading partners, higher energy prices, supply chain disruptions, and the recent drought. The current account deficit is also expected to increase to 9% of GDP both this year and the next.

The authorities intend to use the financing that will become available during the first part of the arrangement and to treat the remaining access as precautionary. The SBA is subject to approval by the IMF Executive board, which is expected to consider it in December.