IMF to offer crisis-hit Serbia $3.9bn loan: Minister

BELGRADE: The International Monetary Fund (IMF) is ready to provide crisis-hit Serbia with up to ¤3bn ($3.9bn) in aid over two years, Economy Minister Mladjan Dinkic said yesterday.

“The IMF is offering us… two billion (euros) this year and one billion (euros) next year” in the form of a stand-by loan, Dinkic said in an interview with B92 radio. “I think that is more than enough,” he said, to counter the full impact of the global economic crisis which has seen a dramatic decline in foreign fund flows across Eastern Europe. 

The offer emerged on the first day of talks here on Monday between an IMF mission and the Serbian government, the minister said.

Hit harder than expected by the global crisis, Serbia had previously said it would seek a $2bn (¤1.5bn) arrangement with the IMF.

The new loan is required to support Serbia’s worsening balance of payments and currency, the dinar, which has lost more than 25 percent of its value since the financial crisis hit the former Yugoslav republic.

Belgrade has slashed its gross domestic product (GDP) growth forecast to between 0.5 and 1.0 percent for 2009 from 6.0 percent predicted before the crisis.

Serbia’s government sought fresh talks with the IMF after its budget income fell well below anticipated in the previous arrangement with the Fund.

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