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International Monetary Fund. European Dept.

Abstract

This report analyses the main economic developments and achievements in the Western Balkan countries, and lays out the key macroeconomic policy challenges for the future.

International Monetary Fund
Failed corporate structures lie at the heart of Serbia’s economic difficulties. But the government emphasized instead the need for public investment and labor tax cuts. Capital inflows pose additional challenges. External concerns leave little room to fiscal maneuver. This puts the focus on public expenditure reform. Recent changes in monetary arrangements are appropriate. These steps would best be taken further—toward inflation targeting. However, the envisaged fiscal relaxation calls much of this into question. Serbia has made significant progress in recent years.
International Monetary Fund
This paper assesses the Federal Republic of Yugoslavia’s (FRY) 2002 Article IV Consultation, Third Review Under the Stand-By Arrangement (SBA), and a Request for an Extended Arrangement. Despite the impressive achievements since late 2000, when FRY succeeded to membership in the IMF, the challenges facing the authorities remain daunting. The FRY authorities’ medium-term program of stabilization sets a good basis for achieving sustainable growth and a viable external position, and deserves the continued support of the IMF through completion of the third review under the current SBA and approval of the proposed extended arrangement.
International Monetary Fund. Research Dept.
This paper examines determinants and leading indicators of banking crises. The paper examines episodes of banking system distress and crisis in a large sample of countries to identify which macroeconomic and financial variables can be useful leading indicators. The best warning signs of the recent Asian crises were proxies for the vulnerability of the banking and corporate sector. Full-blown banking crises are shown to be associated more with external developments, and domestic variables are the main leading indicators of severe but contained banking distress.
International Monetary Fund
This paper reviews economic developments in Slovenia during 1990–96. Slovenia experienced its first positive real GDP growth in 1993. Real GDP grew by 1.3 percent. This modest recovery began under the impetus of buoyant domestic demand, which grew by 8¼ percent; real foreign demand contracted by 6½ percent owing to a recession in Western markets. Despite the growth in real aggregate demand by more than 2 percent, the output response was dampened as domestic demand growth spilled primarily into a boom in consumer goods imports.