BELGRADE: Serbia's Prime Minister Aleksandar Vucic said on Monday that he expected the International Monetary Fund to raise its growth forecast for the country as the lender began a review of a 1.2 billion euro ($1.3 billion) loan.
IMF officials are in Belgrade to discuss the government's plans for its 2017 budget, with Vucic seeking more leeway to increase public sector wages after years of austerity.
Last month, the IMF said it would consider a moderate increase in Serbia's public sector wages and pensions next year after tax revenues and growth came in ahead of expectations, while inflation was lower than expected.
Vucic said he expected the IMF's forecast for this year to be raised from 2.5 percent to 2.7 percent, with the IMF's 2017 growth prognosis to be 3 percent. The IMF's Belgrade mission was not immediately available to comment.
The lender is urging Serbia to trim its bloated public sector and make state utilities turn a profit to comply with the terms of the three-year loan deal, although an upward growth revision would strengthen Vucic's case for more spending.
The IMF wants Serbia's budget deficit to be 2.5 percent of gross domestic product (GDP) this year, lower than a previously set 4 percent target. However, the IMF still wants Belgrade to dispose of or restructure remaining loss-making state firms.
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