Serbia's arrangement with the IMF has had a number of positive effects on the country's economy, but the implementation of the structural reforms, unpopular measures which would prove beneficial in the long run, continues to be the greatest challenge, IMF Resident Representative in Serbia Bogdan Lissovolik stated.

Lissovolik and World Bank Manager for Serbia Loup Brefort are keynote speakers on Wednesday's agenda of 2011 Kopaonik Business Forum, whose topic is New Model of Economy.

Speaking of Serbia's arrangement with IMF, Lissovolik said that it helped preserve the financial stability of the banks and thus prevented financial downfall.

Fiscal deficit has remained moderate, and the key financial rules have been defined, he added. Lissovolik, however, pointed to the unfavourable trends in respect of inflation and unemployment.

On top of that, structural reforms of public sector, reforms of the pension system and business environment have not been completed, and the level of public investments is still low, he stressed.

Underlining that Serbia has to establish economic growth which would be based on the development of private sector, Lissovolik noted that the unsuccessful privatization of certain companies adds to the fear that the private sector might become a driving force for Serbia's development.

Serbia should try to fight unemployment by creating a better business climate which would attract more foreign investments, and by opening new jobs in the private sector, he suggested.

Lissovolik warned that depoliticization of state-owned companies is a must, since they should be led by true professionals.

According to him, the key conditions for the implementation of the new model of economic growth are fiscal rebalance, market liberalization and consensus regarding implementation of structural reforms.

He cautioned that Serbia should not wait to be hit by a major economic crisis, and only then, like Greece, decide to start implementing reforms.