Serbia will begin talks today with the International Monetary Fund on a new stand-by arrangement on Monday, in order to support its worsening balance of payments and currency.
It is not yet clear exactly how much money the Serbia government will seek, with some local media quoting 2 billion euro at the most. Prime Minister Mirko Cvetkovic said earlier this month that Serbia would seek a two-million dollar arrangement with the IMF to support its worsening balance of payments and currency.
“Macroeconomy-wise, we need assistance to cover this year’s budget deficit, which will, as things stand, be significantly higher compared to the projected memorandum on the budget and fiscal policy for 2009,” said Trade Minister Slobodan Milosavljević, as reported by B92.
“We need between EUR 1.5 to 2 billion in order to go through this difficult year without major turbulence,” said the minister.
The negotiations with the IMF mission, which is arriving in Belgrade, are expected to be tough. On Friday the government adopted a united strategy for the talks, aimed at increasing the budget deficit and lowering spending.
The Serbian dinar has lost more than 25 per cent of its value since the global financial crisis began to bite in late 2008.
Belgrade has slashed its gross domestic product growth forecast to between 0.5 and 1.0 per cent for 2009, compared with the 6.0 per cent predicted before the crisis.
The International Monetary Fund’s executive board has already approved a 530-million-dollar stand-by loan in January to help Serbia cope with the downturn.