Crisis-hit Serbia seeks 2 bln more dollars from IMF

Crisis-hit Serbia seeks 2 bln more dollars from IMF:
BELGRADE (AFP) –

Having been hit harder than expected by the worldwide financial crisis, Serbia plans to seek a two-billion-dollar (1.5-billion-euro) additional arrangement with the IMF, media said Saturday.

Growth for 2009 is now expected to be between 0.5 and 1.0 percent, significantly lower than the initially forecasted three percent, Jurij Bajec, economic adviser for Prime Minister Mirko Cvetkovic, told the state-run Tanjug news agency.

"It was necessary to make a new agreement with IMF on an additional two billion dollars as a precondition to revise the budget in April," Bajec was quoted as saying, describing previous economic forecasts as "too optimistic."

The budget deficit is now expected to be three percent of gross domestic product, instead of the 1.5 percent agreed with IMF, he said, adding that inflation -- targeted at eight percent -- would likely be higher as well.

The International Monetary Fund's executive board approved a 530-million-dollar loan last month to help Serbia cope with the downturn.

According to Bajec, Serbia will ask the IMF to extend the initial arrangement to a total amount of 2.5 billion dollars, to be used mostly to cover foreign currency reserves and stabilise the national currency.

The dinar has lost 4.0 percent of its value since the beginning of the year, despite central bank efforts to stem the slide.

Serbia is also negotiating for 510 million dollars in assistance from the European Union as well as 300 million dollars from the World Bank, Bajec said.