Serbia's Economic Path: IMF Agreement for Reforms

The IMF and Serbia reached a staff-level agreement for a second review under a 36-month reform arrangement. The agreement caps Serbia's fiscal deficit at 3% of GDP over three years. Serbia's growth has slowed due to various factors, but a recovery is expected by 2026.

The International Monetary Fund (IMF) announced an agreement with Serbia to advance the second review of a 36-month economic reform arrangement. Known as the Policy Coordination Instrument, this agreement, initiated in October 2024, aims to facilitate Serbia's access to lending on an international level.

The agreement entails a fiscal deficit ceiling of 3% of GDP over the next three years. Subject to approval by the IMF Executive Board, the agreement follows an eight-day assessment visit to Serbia, emphasizing fiscal discipline and economic stability.

Despite recent anti-government protests linked to alleged corruption, Serbia's economy faces challenges from global trade tensions, political uncertainty, and specific sanctions. Yet, the IMF projects an economic recovery by 2026, with steady growth and investment propelled by increased household income and stable financial conditions.

(With inputs from agencies.)