May 8, 2018 / 6:51 AM / a year ago

Serbian finance minister quits a day after IMF talks start

BELGRADE (Reuters) - Serbian Finance Minister Dusan Vujovic has stepped down, the government said on Tuesday, a day after the country began talks with the International Monetary Fund on a new funding programme.

The government said Vujovic had informed Prime Minister Ana Brnabic of the reasons for his departure, which were “of a personal nature”.

A former World Bank economist, Vujovic has served in two governments since 2014 and negotiated a 1.2 billion euro ($1.43 billion) three-year loan deal with the IMF that Serbia successfully completed in February.

Talks on a new arrangement, in exchange for reforms to boost economic growth, got under way on Monday, the central bank said.

In excerpts from a resignation letter made public late on Monday by Belgrade’s daily Blic, Vujovic said he wanted to step down due to “family, professional and personal reasons.”

“During my mandate, measurable results have been achieved, including macroeconomic stabilisation and defining of structural reforms needed to make these results ... sustainable,” Vujovic said.

The Serbian dinar opened higher but then lost ground and was trading down 0.12 percent at 118.19 per euro at 0758 GMT.

Milos Damjanovic, an analyst with Belgrade’s BIRN Consultancy, said Vujovic’s resignation had brought uncertainty to markets.

“The choice of his successor will determine whether the country will head to economic populism or continuation of reforms,” Damjanovic said.

Serbian media speculated that Sinisa Mali, Belgrade’s mayor, who previously served as an economic advisor to President Aleksandar Vucic, may replace Vujovic. Mali was not immediately available for comment.

The Serbian government which ended the 2017 with a small fiscal surplus pledged it will raise public sector wages and pensions this year, on condition economic performance remains good.

Serbia’s economy expanded 2 percent in 2017 and is forecast to grow 3.5 percent this year. It rose 4.5 percent in the first quarter of 2018 according to a flash estimate.

Reporting by Aleksandar Vasovic; Editing by Andrew Heavens and John Stonestreet

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