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IMF Sees Strong Growth For Serbia But Brexit, Turkish Turmoil Pose Risks

Serbia's economic growth should pick up next year to 2.8 percent after a strong performance of 2.5 percent so far this year, the International Monetary Fund said on September 2.

The international lender warned of risks to that scenario, however, and said the government should not be tempted by the "rosy" economic outlook to overspend as its debt levels remain high.

Also to avoid derailing the strong recovery, the IMF said it is crucial that Serbia press on with public sector structural reforms tied to its 1.2 billion euro loan agreement.

"Potential growth could be doubled by the end of the program period," IMF country representative Sebastian Sosa said, describing Serbia's short-term outlook as "rosy."

He said any fallout from a Brexit-led European economic downturn would hurt Serbia's growth prospects, however, as could a resumption of the flows of migrants fleeing war in the Middle East, which burdened governments across the Balkans last year.

The economic impact of the ongoing post-coup crackdown in Turkey also poses a risk to Serbia, he said.

With reporting by Reuters