Abstract
Staff Report for the 2019 Article IV Consultation and Second Review under the Policy Coordination Instrument-Press Release; Staff Report; Information Annex; Staff Statement; and Statement by the Executive Director for Republic of Serbia
1. This statement provides information that has become available since the issuance of the staff report. The information does not alter the thrust of the staff appraisal.
2. The consolidation of core tax administration activities into fewer sites has been completed (end-June 2019 reform target). Starting July 1, Serbia’s tax administration is operating under a new organizational structure, with the number of sites reduced to 37 from the initial 138.
3. Since the launch of the Komercijalna Banka tender (end-June 2019 reform target), the authorities have received letters of interest from six potential buyers. In the second half of July, potential buyers meeting the qualification criteria defined in the public call will be invited to make nonbinding offers.
4. On June 27, Serbia opened negotiations with the European Union on Chapter 9, which covers the field of financial services. This takes the total number of open EU accession chapters to seventeen, of which two have been provisionally closed.
5. The deadline for conversion of Swiss-franc mortgages expired on July 7, although some banks may allow short extensions. According to unofficial estimates by banks, around 90 percent of borrowers have agreed to convert their loans into euros.
6. On July 8, the Parliament adopted a bill amending the law on fees for use of public goods that increases toll fees by 12 percent. The new fees should enter into force on July 15.
7. Year-through-July 5, the NBS has made net purchases in the foreign exchange market of EUR 1.29 billion, of which EUR 710 million was purchased since June 10. Since late-May, the dinar has been under renewed appreciation pressures mostly as a result of strong demand from foreign portfolio investors investing in long-term dinar Treasury bonds as well as strong FDI inflows. Year-to-July 8 the dinar has appreciated 0.4 percent against the euro.