National Bank of Serbia completes IMF mission talks with agreement on first Policy Coordination Instrument review

The National Bank of Serbia reported that discussions between an International Monetary Fund (IMF) mission and Serbia’s delegation have concluded with an agreement on the first review under Serbia’s Policy Coordination Instrument (PCI), alongside the country’s regular Article IV consultation. The IMF mission’s overall assessment was that Serbia’s macroeconomic results remain strong, citing a resilient labour market, declining inflation, high foreign exchange reserves, falling public debt, and a well-capitalised and liquid banking sector. Growth is expected to accelerate from 3% in 2025 to 4% in 2026 and over the medium term, with momentum supported after the first quarter by the state investment programme and increased manufacturing export capacity, while foreign direct investment inflows have slowed. Headline inflation has returned to the National Bank of Serbia’s target range, with monetary policy characterised as appropriately restrictive and expected to remain so given price risks; the fiscal deficit for 2025–2027 is not expected to exceed 3.0% of gross domestic product, supported by special fiscal rules on indexation of public sector salaries and pensions. The release also highlighted continued reform priorities, including labour market regulation modernisation, further public sector and judiciary digitalisation, and additional work to ensure financial sustainability and operational efficiency in state-owned enterprises in the energy sector. The agreed PCI review now requires approval by the IMF Executive Board; the National Bank of Serbia noted that the PCI is advisory in nature and does not involve access to IMF financing.