Abstract
REPUBLIC OF SERBIA
Title page
REPUBLIC OF SERBIA
STAFF REPORT FOR THE 2021 ARTICLE IV CONSULTATION AND REQUEST FOR A 30-MONTH POLICY COORDINATION INSTRUMENT—INFORMATIONAL ANNEX
June 3, 2021
Prepared By
European Department
(in consultation with other departments)
Contents
FUND RELATIONS
COLLABORATIONS WITH OTHER INTERNATIONAL FINANCIAL INSTITUTIONS STATISTICAL ISSUES
Fund Relations
(as of March 31, 2021)
Membership Status
Joined December 14, 1992 (succeeding to membership of the former Socialist Federal Republic of Yugoslavia); accepted Article VIII on May 15, 2002. Serbia continues the membership in the Fund of the former state union of Serbia and Montenegro—previously the Federal Republic of Yugoslavia— since July 2006.
General Resources Account
| SDR Million | Percent Quota |
|---|---|
| Quota 654.80 | 100.00 |
| Fund Holdings of Currency 608.04 | 92.86 |
| Reserve Position 46.78 | 7.14 |
| SDR Million | Percent Quota |
|---|---|
| Quota 654.80 | 100.00 |
| Fund Holdings of Currency 608.04 | 92.86 |
| Reserve Position 46.78 | 7.14 |
SDR Department
| SDR Million | Percent Allocation | |
|---|---|---|
| Net cumulative allocation | 445.04 | 100.00 |
| Holdings | 9.11 | 2.05 |
| SDR Million | Percent Allocation | |
|---|---|---|
| Net cumulative allocation | 445.04 | 100.00 |
| Holdings | 9.11 | 2.05 |
Outstanding Purchases and Loans
None.
Latest Financial Arrangements
| Type | Approval Date | Expiration Date | Amount Approved (SDR Million) | Amount Drawn (SDR Million) |
|---|---|---|---|---|
| Stand-By | Feb 23, 2015 | Feb 22, 2018 | 935.40 | 0.00 |
| Stand-By | Sep 29, 2011 | Mar 28, 2013 | 935.40 | 0.00 |
| Stand-By | Jan 16, 2009 | Apr 15, 2011 | 2,619.12 | 1,367.74 |
| EFF | May 14, 2002 | Feb. 28, 2006 | 650.00 | 650.00 |
| Type | Approval Date | Expiration Date | Amount Approved (SDR Million) | Amount Drawn (SDR Million) |
|---|---|---|---|---|
| Stand-By | Feb 23, 2015 | Feb 22, 2018 | 935.40 | 0.00 |
| Stand-By | Sep 29, 2011 | Mar 28, 2013 | 935.40 | 0.00 |
| Stand-By | Jan 16, 2009 | Apr 15, 2011 | 2,619.12 | 1,367.74 |
| EFF | May 14, 2002 | Feb. 28, 2006 | 650.00 | 650.00 |
Projected Payments to the Fund
| Forthcoming (SDR Million) | |||||
|---|---|---|---|---|---|
| 2021 | 2022 | 2023 | 2024 | 2025 | |
| Principal | |||||
| Charges / Interest | 0.18 | 0.22 | 0.22 | 0.22 | 0.22 |
| Total | 0.18 | 0.22 | 0.22 | 0.22 | 0.22 |
| Forthcoming (SDR Million) | |||||
|---|---|---|---|---|---|
| 2021 | 2022 | 2023 | 2024 | 2025 | |
| Principal | |||||
| Charges / Interest | 0.18 | 0.22 | 0.22 | 0.22 | 0.22 |
| Total | 0.18 | 0.22 | 0.22 | 0.22 | 0.22 |
Implementation of HIPC Initiative
Not applicable.
Implementation of Multilateral Debt Relief Initiative (MDRI)
Not applicable.
Safeguards Assessment
Not applicable.
Exchange Arrangement
Serbia accepted the obligations under Article VIII, Sections 2, 3, and 4, on May 15, 2002, and maintains a system free of restrictions on payments and transfers for current international transactions, except with respect to blocked pre-1991 foreign currency savings deposits (IMF Country Report No. 02/105). The de jure exchange rate arrangement is a floating system since January 1, 2001. According to the 2009 Monetary Policy Program, the National Bank of Serbia (NBS) implements a managed floating exchange rate regime. The de facto exchange rate arrangement was reclassified to “stabilized” from “crawl-like” (effective March 2, 2018).
Last Article IV Consultation
Concluded on July 22, 2019 (IMF Country Report No. 19/238).
FSAP Participation
Serbia participated in the Financial Sector Assessment Program in 2005, and the Executive Board discussed the Financial System Stability Assessment in February 2006 (IMF Country Report No. 06/96). An update under the Financial Sector Assessment Program was conducted in 2009 and the Executive Board discussed the Financial System Stability Assessment in March 2010 (IMF Country Report No. 10/147).
Technical Assistance since Last Article IV consultation (July 2019)1
| Department | Timing | Purpose |
|---|---|---|
| MCM | July 2019 | Primary Dealer System |
| STA | September 2019 | Government Finance Statistics |
| FAD | September 2019 | Tax Administration Transformation |
| FAD | November 2019 | Strengthening Fiscal Risks Analysis |
| FAD | April 2020 | Developing Capacity of PIM Unit |
| FAD | June 2020 | Tax Administration Desk Diagnostics |
| FAD | August 2020 | Fiscal Risks from COVID-19 Guarantee Scheme |
| STA | September 2020 | Government Finance Statistics |
| FAD | November 2020 | Establishing an Unexplained Wealth Team |
| FAD | January 2021 | Unexplained Wealth Compliance Unit |
| STA | February 2021 | Government Finance Statistics |
| FAD | February 2021 | Implementing an Unexplained Wealth Audit Capacity |
| FAD | March 2021 | Follow-up Fiscal Risks from COVID-19 Guarantee Scheme |
| Department | Timing | Purpose |
|---|---|---|
| MCM | July 2019 | Primary Dealer System |
| STA | September 2019 | Government Finance Statistics |
| FAD | September 2019 | Tax Administration Transformation |
| FAD | November 2019 | Strengthening Fiscal Risks Analysis |
| FAD | April 2020 | Developing Capacity of PIM Unit |
| FAD | June 2020 | Tax Administration Desk Diagnostics |
| FAD | August 2020 | Fiscal Risks from COVID-19 Guarantee Scheme |
| STA | September 2020 | Government Finance Statistics |
| FAD | November 2020 | Establishing an Unexplained Wealth Team |
| FAD | January 2021 | Unexplained Wealth Compliance Unit |
| STA | February 2021 | Government Finance Statistics |
| FAD | February 2021 | Implementing an Unexplained Wealth Audit Capacity |
| FAD | March 2021 | Follow-up Fiscal Risks from COVID-19 Guarantee Scheme |
In addition, technical assistance was available through resident advisors covering tax administration, public financial management, and government finance statistics.
Resident Representative
Mr. Sebastian Sosa took his position as Resident Representative in July 2016.
Collaborations with other International Financial Institutions
As of March 31, 2021, Serbia has collaborations with the World Bank Group, the European Bank for Reconstruction and Development (EBRD), the European Investment Bank, and the Council of Europe Development Bank.
| International Financial Institution | Hyperlink |
|---|---|
| The World Bank Group | https://www.worldbank.org/en/country/serbia/overview#4 |
| The European Bank for Reconstruction and Development (EBRD) | https://www.ebrd.com/serbia.html |
| The European Investment Bank | https://www.eib.org/en/projects/regions/enlargement/the-western-balkans/serbia/index.htm |
| Council of Europe Development Bank | https://coebank.org/en/about/member-countries/serbia/ |
| International Financial Institution | Hyperlink |
|---|---|
| The World Bank Group | https://www.worldbank.org/en/country/serbia/overview#4 |
| The European Bank for Reconstruction and Development (EBRD) | https://www.ebrd.com/serbia.html |
| The European Investment Bank | https://www.eib.org/en/projects/regions/enlargement/the-western-balkans/serbia/index.htm |
| Council of Europe Development Bank | https://coebank.org/en/about/member-countries/serbia/ |
Statistical Issues
I. Assessment of Data Adequacy for Surveillance
General
Data provision is broadly adequate for surveillance with some key data shortcomings in the government finance statistics.
National Accounts
The real sector data are compiled by the Statistical Office of the Republic of Serbia (SORS). The GDP data are compiled using expenditure and production methods. National accounts statistics of the Republic of Serbia are based on conceptual framework of the 2008 SNA/ESA 2010. Data on GDP and its components are disseminated at current prices, previous year’s prices in absolute values (RSD millions), and as chain-linked volume measures (reference year 2010). Quarter-to-quarter growth rates are derived from seasonally adjusted data. Annual and quarterly data are available from 1995 onwards.
Procedures for the compilation of annual GDP estimates by production are in line with internationally recommended practices. Production account estimates are compiled with an adequate methodology and at very detailed levels.
Sources and method for the compilation of GDP by expenditures are in general, adequate.
Reconciliation between the independent annual GDP estimates based on the production and expenditure approaches is being made at an aggregate level, although the original differences are not significant. There are no reliable independent estimates of changes in inventories and net acquisition of valuables on a quarterly basis. These components are estimated as the residual between quarterly GDP by the production approach, which is considered more reliable, and the remaining components of GDP by expenditure.
The SORS recently revised GDP data going back to 2005. This is part of an ongoing project to enhance the national accounts compilation process and produce more robust and accurate GDP estimates.
Price Statistics
The SORS compiles and disseminates monthly indices for consumer prices, producer prices, industrial production, as well as unit-value indices for imports and exports. Concepts and methods used to compile the CPI, as well as other price statistics, attempt to reflect international standards and best practices.
External Sector Statistics
Balance of payments statistics are compiled by the NBS and reported to STA for re-dissemination in the IFS and the Balance of Payments Statistics Yearbook. Since April 2014, BOP data have been compiled in accordance with the Sixth Edition of the Balance of Payments and International Investment Position Manual (BPM6). The first BPM6 data were introduced in 2014 starting with Q1 2007 (balance of payments) and Q4 2013 (IIP).
Recent country reports as part of an European Project for the improvement of ESS in Balkan countries (2019–2021) indicate that Serbia compiles a full set of ESS data, including monthly BOP and quarterly IIP, as well as more detailed breakdowns, such as foreign direct investment, trade statistics, and cross-border securities statistics among others. Improvements to NBS’ database management system have also been noted, including launching of a new, modern web site. Work on further improving the quality of ESS is ongoing, including on direct reporting for trade credit, manufacturing and trade in services.
Government Finance Statistics
Monthly fiscal data are compiled and published by the Ministry of Finance on a cash basis, broadly following the methodology of the Manual on Government Finance Statistics 1986 (GFSM 86). The sector coverage is not fully in line with the definitions of central and general government in the IMF GFSM 2014 Manual, mainly because it excludes extrabudgetary units. Principal data sources are the Republican Treasury and budgetary execution reports, local government, social security funds, the Road Fund, and the ‘Koridori’ Fund. Since 2001, Serbia has made efforts to bring the existing budget reporting system in line with the GFSM 2001, and since 2018, GFSM 2014 methodology. The MOF, with technical assistance from the IMF Statistics Department, is implementing an updated bridge from the chart of accounts to the GFSM 2014 classification, bringing the presentation in line with the GFSM 2014 framework, including financing items, as well as improving reconciliation and consolidation methods. The work to upgrade its IMF fiscal surveillance reporting to the GFSM 2014 framework is now well advanced, and it is expected that GFSM 2014 based monthly reporting will commence in mid-2021.
In January 2021, SORS resumed reporting of annual revenue and expenditure data for the budgetary general government to the GFS Yearbook of the IMF Statistics Department. The data are cash-based and use the same data sources as used in the monthly fiscal reporting.
SORS and NBS are working on a wider GFS implementation project, with technical assistance from the IMF Statistics Department and Eurostat, to prepare comprehensive GFS data conforming to ESA 2010 and GFSM 2014 for official statistics reporting to Eurostat and the IMF Statistics Department. This includes the comprehensive classification of general government units (completed), including accrual estimates, ensuring internal accounting consistency within the GFS framework, aligning with the national accounts, and developing COFOG data.
Since January 2019, NBS is reporting budgetary central government debt data on loans and securities to the World Bank/IMF Quarterly Public Sector Debt Database. Although source data are available, NBS has not committed to expand reporting to cover all debt instruments and to the public sector nor even general government.
Monetary and Financial Statistics
Monetary and financial statistics are compiled by the NBS, broadly following the methodology set forth in the Monetary and Financial Statistics Manual, 2000 (MFSM), and meeting the GDDS recommendations with respect to periodicity and timeliness for financial sector data. Monetary data are reported to the Fund using Standardized Report Forms beginning December 2013.
The coverage of monetary statistics includes the central bank and the other depository corporations (ODCs) and could be improved by including remaining ODCs (including banks in liquidation) and other financial corporations.
Serbia reports data on several series indicators of the Financial Access Survey (FAS) including the two indicators (commercial bank branches per 100,000 adults and ATMs per 100,000 adults) adopted by the UN to monitor Target 8.10 of the Sustainable Development Goals (SDGs).
Serbia has yet to compile and submit to STA Financial Soundness Indicators for publication on the IMF website.
II. Data Standards and Quality
Serbia implemented the recommendations of the enhanced General Data Dissemination System (e-GDDS) and launched the National Summary Data Page on June 8, 2018. Its metadata were posted on the IMF Data Dissemination Bulletin Board on May 1, 2009.
ROSC report on Fiscal Transparency was published in May 2009.
Table of Common Indicators Required for Surveillance
(As of May 27, 2021)
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Including currency and maturity composition.
Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Semi-annually (SA), Annually (A), Irregular (I), or Not Available (NA).
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Table of Common Indicators Required for Surveillance
(As of May 27, 2021)
| Date of latest observation | Date received | Frequency of data 4 | Frequency of reporting 4 | Frequency of publication 4 | |
|---|---|---|---|---|---|
| Exchange rates | May 26, 2021 | May 27, 2021 | D and M | D and M | D and M |
| International reserve assets and reserve liabilities of the monetary authorities 1 | May 26, 2021 | May 27, 2021 | D | D | M |
| Reserve/base money | May 26, 2021 | May 27, 2021 | D and M | W and M | W and M |
| Broad money | April 2021 | May 25, 2021 | M | M | M |
| Central bank balance sheet | April 2021 | May 25, 2021 | M | M | M |
| Consolidated balance sheet of the banking system | April 2021 | May 25, 2021 | M | M | M |
| Interest rates 2 | May 26, 2021 | May 27, 2021 | D | D | D |
| Consumer price index | April 2021 | May 10, 2021 | M | M | M |
| Revenue, expenditure, balance and composition of financing – general government | March 2021 | May 4, 2021 | M | M | M |
| Revenue, expenditure, balance and composition of financing – central government | March 2021 | May 4, 2021 | M | M | M |
| Stocks of central government and central government-guaranteed debt 3 | March 2021 | May 4, 2021 | M | M | M |
| External current account balance | March 2021 | May 19, 2021 | M | M | M |
| Exports and imports of goods and services | March 2021 | May 19, 2021 | M | M | M |
| GDP/GNP | 2020, Q4 | March 1, 2021 | Q | Q | Q |
| Gross external debt | February 2021 | March 31, 2021 | M | M | M |
| International investment position 5 | February 2021 | March 31, 2021 | Q | Q | Q |
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Including currency and maturity composition.
Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Semi-annually (SA), Annually (A), Irregular (I), or Not Available (NA).
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Table of Common Indicators Required for Surveillance
(As of May 27, 2021)
| Date of latest observation | Date received | Frequency of data 4 | Frequency of reporting 4 | Frequency of publication 4 | |
|---|---|---|---|---|---|
| Exchange rates | May 26, 2021 | May 27, 2021 | D and M | D and M | D and M |
| International reserve assets and reserve liabilities of the monetary authorities 1 | May 26, 2021 | May 27, 2021 | D | D | M |
| Reserve/base money | May 26, 2021 | May 27, 2021 | D and M | W and M | W and M |
| Broad money | April 2021 | May 25, 2021 | M | M | M |
| Central bank balance sheet | April 2021 | May 25, 2021 | M | M | M |
| Consolidated balance sheet of the banking system | April 2021 | May 25, 2021 | M | M | M |
| Interest rates 2 | May 26, 2021 | May 27, 2021 | D | D | D |
| Consumer price index | April 2021 | May 10, 2021 | M | M | M |
| Revenue, expenditure, balance and composition of financing – general government | March 2021 | May 4, 2021 | M | M | M |
| Revenue, expenditure, balance and composition of financing – central government | March 2021 | May 4, 2021 | M | M | M |
| Stocks of central government and central government-guaranteed debt 3 | March 2021 | May 4, 2021 | M | M | M |
| External current account balance | March 2021 | May 19, 2021 | M | M | M |
| Exports and imports of goods and services | March 2021 | May 19, 2021 | M | M | M |
| GDP/GNP | 2020, Q4 | March 1, 2021 | Q | Q | Q |
| Gross external debt | February 2021 | March 31, 2021 | M | M | M |
| International investment position 5 | February 2021 | March 31, 2021 | Q | Q | Q |
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Including currency and maturity composition.
Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Semi-annually (SA), Annually (A), Irregular (I), or Not Available (NA).
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
The list does not include visits by regional advisors.