BELGRADE: The International Monetary Fund welcomed on Monday Serbia's move to reduce spending to stabilise its finances and announced its team will visit Belgrade next month to start talks on a new loan agreement.
The Serbian parliament approved on Sunday a revised 2014 budget, introducing cuts to pensions and public sector wages from the beginning of November.
The government said these measures were needed to help secure an IMF deal, which in turn is seen as crucial to enable a reduction in borrowing costs and to reassure investors worried over the size of Serbia's deficit and debt pile. "We welcome the authorities' renewed commitment to pursue the urgently needed fiscal and structural reforms," the IMF representative for Serbia, Daehaeng Kim, said in a statement.
Kim said an IMF team, led by Zuzana Murgasova, will visit Belgrade between Nov. 4-20 to discuss a new IMF-backed programme.
The Washington-based IMF suspended its last loan deal with Serbia in February 2012 when the European Union candidate country fell behind with spending promises and debt pledges.
Earlier on Monday, Serbia's Fiscal Council, a government-appointed advisory body, warned that recent pension and wage cuts would not avert a debt squeeze and urged the government to end subsidises to unprofitable state companies.
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