Bloomberg News

Russia Considering Further Financing for Serbia, Ambassador Says

August 22, 2012

Russia is in talks with Serbia to increase its financial support for the Balkan nation after providing an $800 million loan for infrastructure projects, Russia’s ambassador to Belgrade said.

“We need to see first what Serbia’s needs are, then we’ll define the possibilities,” Alexander Konuzin told reporters after meeting with Infrastructure Minister Milutin Mrkonjic in Belgrade today. “I hope we’ll have concrete results very soon,” he said, without elaborating.

The current loan will be used for repairing and upgrading Serbian railroads and won’t be reallocated to prop up the budget, Mrkonjic said, rejecting local media reports that $300 million would be used to narrow Serbia’s widening fiscal gap.

“The credit will be used as intended, for railroads,” Mrkonjic said after meeting with Konuzin and representatives of Russian Railways, whose subsidiary is to serve as the main contractor in the projects.

Serbia’s economy will contract 0.5 percent this year, the central bank said Aug. 15. The government of Premier Ivica Dacic is preparing a cost-cutting plan after the six-month budget deficit reached 111.2 billion dinars ($1.18 billion), almost three-quarters of the full-year target.

To contact the reporter on this story: Misha Savic in Belgrade at msavic2@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net


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