Republic of Serbia: Third Review Under the Stand-By Arrangement and Request for Modification of Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director for Republic of Serbia

This paper presents Republic of Serbia’s Third Review under the Stand-By Arrangement (SBA) and Request for Modification of Performance Criteria. With the impact of the energy crisis fading, growth is expected to increase to close to 4 percent in 2024 alongside a robust labor market, real wage increases and higher investment. Macroeconomic outturns under the program remain strong. Growth is increasing, inflation is falling, the current account deficit has narrowed, reserves are at record highs, and public debt is declining. The authorities are firmly committed to their 2024 fiscal plans, which are aligned with the SBA’s fiscal targets, but higher public investment means that deficits over 2025–27 are set to be higher than previously envisaged. Stepped-up public investment will be accompanied by additional transparency and public investment management reforms. The financial situation of the energy sector state-owned enterprises (SOE) has been stabilized. Structural reforms in the energy sector companies, SOE governance, and broader fiscal management are progressing well.