IMF allowed budget deficit to be increased at 4.5%

- International Monetary Fund (IMF) has allowed Serbia to increase budget deficit from 3 to 4.5% - the Head of IMF Mission to Serbia, Albert Jeger, said today (September 1st, 2009) in Belgrade.

He said at the press conference that IMF expected the production in Serbia to be stabilized in the second half of the year, and that the drop in gross national product would reach 4% in 2009, while recovery and growth of GNP by 1.5% were expected in 2010.

The Minister of Finance of Serbia, Diana Dragutinović, said that the cuts in salaries and pensions and the growth of taxes would not be needed because the budget had, so far, been "restrictively executed".

- The Government of Serbia will resume the talks about second audit of the arrangement with IMF on October 20th when the mission of that finance institution visits Belgrade again - she said and added that they had already reached the agreement on monetary and fiscal policy and the budget for year 2009, while the agreement for year 2010 still needed to be reached.

The second audit of the credit arrangement to Serbia, worth 2.9 billion EUR, started on August 24th, 2009.