BELGRADE — Russia has offered Serbia a $500 million loan, half the amount Belgrade was seeking, and Serbia's finance minister said a deal could be signed next week, Blic daily newspaper reported Thursday.
The loan, to help finance Serbia's budget deficit and restore growth this year after a recession last year, would be for 10 years with a two-year grace period and 3.5 percent annual interest, Finance Minister Mladjan Dinkic was quoted as saying.
In January, Dinkic's Russian counterpart, Anton Siluanov, said Serbia was asking Russia for a $1 billion loan for budget backing and Blic's report gave no reason for a lower amount being offered.
"I will propose to the government to accept the offer from our Russian partners and we could sign the deal on April 9 in Moscow," Blic quoted Dinkic as saying.
This year, Serbia faces a budget gap of about 3.6 percent of national output and needs about 4.8 billion euros ($6.2 billion) to finance debt seen at 65 percent of gross domestic product, higher than a 45 percent limit set by domestic fiscal rules.
The country has already borrowed $800 million from Russia, its traditional Slavic and Orthodox Christian ally, to overhaul railways and also sought other sovereign lenders, including the United Arab Emirates and China.
Dinkic said Serbia planned to borrow for budget backing from Moscow only on condition that the loan is more favorable than a $1.5 billion seven-year eurobond sold two months ago at a yield of 5.15 percent.
To reassure investors, Serbia, which aspires to join the European Union, will open talks with the International Monetary Fund next month on a precautionary loan deal, after the lender suspended a 1 billion euro deal last year over broken spending promises.
Serbia's economy shrank 1.7 percent last year, due to the spillover of the crisis in the euro zone, its main trade partner.
The ruling coalition is targeting growth of 2 percent of GDP this year, pinning its hopes on increased production and exports from its automotive industry and agriculture.
Related articles:
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.
