Serbia, IMF Agree on Budget

An IMF delegation and the Serbian government have reached an agreement on Serbia’s state budget for next year.

Broadcaster RTS reports that there will be no increase in VAT and that the projected budget deficit will be 4 per cent, half a per cent lower than for this year.

Medium and long term plans for the reform of the public sector reportedly remain to be discussed and defined by the end of negotiations between the two parties on November 4.

Official negotiations on the second and third revisions of an IMF loan agreement, approved earlier this year and worth roughly 2.9 billion dollars (1,9 billion euros), started on October 26.

Serbian Finance Minister Diana Dragutinovic said on Thursday that the arrangement will be extended for six months (until October 2011) as Serbia will not need to take two fresh loan tranches.

She pointed out that the current budget deficit is below 100 billion dinars (about 1 billion euros).