BELGRADE, June 13 (Xinhua) -- Serbia applied for a new, non-financial arrangement with the International Monetary Fund (IMF), expecting that it will be signed in July and last until January 2021, the country's Finance Minister Sinisa Mali told media at a joint press conference with the IMF mission representatives on Wednesday.
The decision to engage for 30 months in IMF's recent non-financing tool, known as the Policy Coordination Instrument (PCI), was revealed at the end of the three-day visit of the IMF mission to Serbia, whose representatives, besides Mali, also met Serbian Prime Minister Ana Brnabic.
"In the past two days we had tough, but constructive discussions with the representatives of the IMF, but I can say with satisfaction that we fulfilled all necessary conditions and made all the arrangements in order to sign the new arrangement next month," Mali said.
He revealed that the legislation that decreased pensions within the country's 2014 austerity measures will be annulled before the end of the year, thus returning them to the previous level.
"We had tough discussions about salaries in public sector, but we also managed to negotiate an increase," Mali said, explaining that the exact amount of increase depends on space for it in the budget and will be known in September.
He announced that the country will initiate a reform of the salary system in the public sector, which is required by the IMF and will be completed in January 2019.
Head of the IMF mission to Serbia James Roaf said that the Executive Board will bring the final decision about the arrangement in mid-July.
Roaf continued that policies of the PCI aim to ensure macroeconomic and financial stability as well as progress in realization of structural and institutional reforms, and that with their implementation Serbia's macroeconomic outlooks "remain very good".
"The growth reached 4.6 percent in the first quarter of 2018 and it is expected that it will be at least 3.5 percent this year. Inflation remains low and it's estimated that it will be around 2 percent by the end of 2018, thanks to the adequate monetary policy of the National Bank of Serbia," he said.
Roaf said that by the end of the new arrangement, Serbia's debt should decrease bellow 50 percent, which would open space for capital investments and targeted decrease of taxation for certain areas of industry and labor.
Serbia's previous 1.2 billion-euro three-year precautionary agreement with the IMF ended in February.