1. Serbia has weathered the COVID-19 crisis well so far, but high uncertainty about the path of the pandemic persists. Serbia entered the crisis with sound macroeconomic fundamentals. In response to the pandemic, the authorities implemented a sizeable policy package, which helped mitigate the adverse impact on economic activity and supported the economic rebound. Serbia also embarked on one of the fastest COVID-19 vaccine rollouts in Europe (Text Figure 1). Nevertheless, high uncertainty about the course of the pandemic and its delayed effects on firms, banks, and households persist, and sustaining a solid economic recovery remains a policy priority.
Recent economic developments. Economic activity recovered following a severe contraction in 2Q2020 caused by the pandemic. Real output in 2020 has been revised up and is now projected to contract by only 1.5 percent, on the back of positive highfrequency indicators. Inflation remains low. The banking system remains liquid. After the two waves in March and July, the number of new infections has accelerated again since mid-October, reaching record-high levels and a larger-than-expected deterioration presents a clear downside risk.
Recent economic developments. Notwithstanding a sizeable policy response, the COVID-19 pandemic is having a significant adverse impact on Serbia’s economic activity, with output in 2020 projected to contract by 3 percent, compared to a
4 percent increase expected prior to the COVID-19 shock. The shock is affecting the economy through lower external demand, weaker foreign direct investment and remittances, disruptions in regional and global supply chains, and domestic supply constraints. The government took strong actions to contain the pandemic at an early stage, but the number of infections accelerated again towards end-June. As a result, some containment measures have been re-introduced.
The Articles of Agreement of the International Monetary Fund were adopted at the United Nations Monetary and Financial Conference (Bretton Woods, New Hampshire) on July 22, 1944. They were originally accepted by 29 countries and since then have been signed and ratified by a total of 189 Member countries. As the charter of the organization, the Articles lay out the Fund’s purposes, which include the promotion of “international monetary cooperation through a permanent institution which provides the machinery for consultation and collaboration on international monetary problems”. The Articles also establish the mandate of the Organization and its members’ rights and obligations, its governance structure and roles of its organs, and lays out various rules of operations including those related to the conduct of its operations and transactions regarding the Special Drawing Rights. The key functions of the IMF are the surveillance of the international monetary system and the monitoring of members’ economic and financial policies, the provision of Fund resources to member countries in need, and the delivery of technical assistance and financial services.
Since their adoption in 1944, the Articles of Agreement have been amended seven times, with the latest amendment adopted on December 15, 2010 (effective January 26, 2016). The Articles are complemented by the By-laws of the Fund adopted by the Board of Governors, themselves being supplemented by the Rules and Regulations adopted by the Executive Board.