Republic of Serbia

The program is on track and economic performance remains robust, with unemployment falling to record-low levels. Strong fiscal performance continued in the first three quarters of 2019, and the fiscal deficit is expected to be limited to 0.5 percent of GDP this year and next, in line with the program. But the public sector wage increases adopted with the 2019 supplementary budget exceed staff advice. Inflation has remained low, consistent with the program and the National Bank of Serbia (NBS) has appropriately implemented three rate cuts since July. The financial sector remains stable.