IMF, Serbia reach agreement

The IMF and the Serbian government successfully completed the third review of their 2.9 billion-euro arrangement, IMF mission chief Albert Jaeger told a press conference in Belgrade on Tuesday.

He said that key quantitative targets under the programme have been met and that the IMF Board will likely approve the disbursement of the next 350m-euro tranche in late March.

He also said the fund raised its 2010 GDP growth forecast for Serbia to 2%, up from the original estimate of 1.5%. The IMF then expects growth to accelerate to 3% in 2011, but warned that earlier rates of 5% to 6% economic expansion per year will not be achieved soon. The mission urged Serbia to therefore reduce public spending, increase output of export-orientated goods and strengthen the national currency.

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