BELGRADE (Reuters) – The International Monetary Fund (IMF) has reached a 36-month deal with Serbia to help support its economic reforms, the IMF said on Wednesday, in a move that could make it easier for the Balkan country to secure lending from other sources.
The so-called Policy Coordination Instrument (PCI) provides help outside of direct financial support.
“The agreement is subject to approval by the IMF executive board,” the lender said.
Serbia has recently ended a two-year 2.4 billion euro ($2.6 billion) standby arrangement with the IMF.
The IMF said it expected Serbia’s growth to increase to around 4.25% over the coming years, adding that the country’s financial sector was “well-capitalized and liquid.”
It said that foreign demand and commodity price outlooks represented risks for the Serbian economy.
“Serbia therefore needs ample buffers against uncertainties and risks,” it said.
“Foreign exchange reserves and government deposits are high, public debt and external debt are sustainable, and the banking system is strong. Continued prudent policies provide an additional important buffer.”
($1 = 0.9195 euros)
(Reporting by Ivana Sekularac; Editing by Jan Harvey and Mark Potter)
