International Monetary Fund (IMF) Resident Representative in Serbia Bogdan Lissovolik said on Sept. 16 that Serbia's economic recovery is still slow, but is "on a sounder footing."

Speaking at Raiffeisen Bank's Annual Business Conference in Belgrade, Lissovolik said the recovery that started in the second half of 2009 has lost momentum and that the fact people are still losing their jobs is cause for concern.

He went on to say that, according to IMF estimates, Serbia's GDP will increase by 1.5 percent in 2010, while in 2011 it will rise by three percent.

According to him, three percent growth is slightly below the growth level that will boost the creation of new jobs.

Lissovolik also said that financial stability in Serbia has improved, but that inflation has become a risk.

"Inflation in Serbia will, according to the IMF's expectations, be within the projections of the National Bank of Serbia, but there are risks that will push it toward the upper inflationary limit," he said.

The resident representative underscored that fiscal policy is one of the chief sectors in Serbia experiencing problems and stressed that budget spending should be reduced.

Expenditures for pensions and salaries are also a problem that needs solving, he highlighted, adding that only in Italy and Greece do those expenditures account for a greater share of GDP than in Serbia.