The International Monetary Fund (IMF) and Serbia agreed on the country's economic targets, paving the way for the disbursement of more funds from a 2.9-billion-euro (3.55-billion- dollar) standby credit, officials said Thursday, according to dpa. The fourth, 380-million-euro tranche will become available after the IMF managing board approves it, which is normally a formality. The IMF has revised downwards economic growth expectations for Serbia from 2 to 1.5 per cent in 2010 and from 4 to 3 per cent next year. Because of the revised forecasts, the IMF will now allow Serbia a larger budget deficit than previously planned, of 4.8 instead of 4 per cent of the nation's gross domestic product. Serbia will keep pensions and public sector wages frozen until the end of the year and begin reforming its pension system in 2011, Finance Minister Diana Dragutinovic told a press conference. It remains unclear when Serbia may pass so-called fiscal responsibility laws, aimed at tighter spending controls, which the IMF also wants. Serbia secured the standby credit from the IMF a year ago to shore up its fragile macroeconomic stability and has so far drawn 1.3 billon euros.
