Success of reforms reflected in raised salaries and pensions – IMF expecting further fiscal progress

The head of the IMF Mission to Serbia, James Roef, stated that raising salaries and pensions was a way for citizens to benefit from the results of successful reforms. He said while guesting on RTS Dnevnik that the increase reflected the success of the reforms and that it was important for people to see that.

Talking about the IMF's agreement with the Government on raising salaries and pensions, Roef said that the situation in 2015 had been similar.

– This is a reflection of the fiscal consolidation. The income is higher than expected, which has enabled salaries and pensions to be raised – Roef said and pointed out that it was a way of “sharing a part of the success with the citizens”.

– It's important for people to be able to see that the reforms have been successful, that there's an economic growth, that fiscal problems are being solved and that progress is being made and maintained – Roef said.

He added that it remained to be seen what the next year would be like and said that he expected further fiscal progress.

– This is a long road and there's a lot of work to be done. I believe that there are several risks, the biggest of which is the risk of slowing down the reforms – Roef said.

Talking about problematic public enterprises, Roef said that some of them had serious problems, which had lasted for years.

– There's an enterprise with 1,000 employees which has piled up energy debts. The challenge is to enforce financial discipline, and the solution will be different for each enterprise. Some of them need to go into bankruptcy, whereas others might continue operating. Some other yet need to be restructured and their management needs to be improved – Roef said.

He pointed out that the solution was to prevent incurring debts and burdening the fiscal budget. As he says, the deadline is “now”.

– It's very important for clear plans to be made for those enterprises in 2017, following the approval of the arrangement, and for them to be carried out as soon as possible – Roef said.

He said that he was pleasantly surprised with the cooperation with the Government and the carrying out of the reforms.

– I was surprised how good our relations with the Government were on the technical level, how dedicated they are to improving the situation. This is a difficult job, but it has produced results. Many have had doubts, and it's a pleasant surprise that Serbia has managed to carry out this program – Roef said.

Međunarodni monetarni fond-MMF Beograd

Vlada Republike Srbije

International Monetary Fund

IMF

James Roef

raising salaries and pensions

fiscal consolidation

economic growth

restructuring public enterprises