Belgrade: Serbia's export-led economic recovery has "gained momentum", but a higher inflation rate and foreign financing were the main risks to macroeconomic stability, the IMF said in a report on Sunday.
"The export-led economic recovery has gained momentum, but external risks remain significant," the International Monetary Fund said in the report.
It was the IMF's sixth review of Serbia's economic performance under a loan agreed in January 2009, and subsequently raised to €2.98 billion (Dh14.13 billion) in May that year.
Serbia has so far drawn €1.46 billion from the IMF loan. "Compared with most surrounding peers, Serbia is recovering at a slow but steady pace," the IMF said, but warned of a surge in inflation late in 2010.
The State Statistics Bureau said in December Serbia's economy grew by 1.5 per cent in 2010 while inflation was 11.5 per cent, nearly double the forecast.
The unemployment rate rose to 19.2 per cent of active working population.
The IMF said that "GDP growth is picking up on the back of a competitive exchange rate and rebounding industrial output and exports".
"Growth is still projected at 1.5 and 3.0 per cent in 2010 and 2011, respectively," it said. "However, foreign financing risks remain elevated in the context of a still large trade deficit and subdued capital inflows," the IMF warned.
Serbia also faced "significant risks from fresh adverse spillovers from the region and from euro-area periphery developments," IMF said.
"Foreign financing risks remain elevated as the external trade deficit is still large, and capital inflows have become much less exuberant than before the crisis," it said.
