According to new estimates, instead of the previously planned 3.5 percent growth, the GDP in Serbia will decline, causing the need to adjust all budget expenses accordingly, he told journalists in the Serbian government.

Jaeger said that he expects the Serbian economy to stagnate in 2010.

He did not specify when the IMF board of directors would confirm the agreed EUR3 billion arrangement with Serbia, but he did state that the Serbian government would need to fulfill certain conditions before that happens.

He said that this implies that the government should adopt the budget rebalance, propose changes in the tax regulations for the realization of the planned economic policy, and obtain confirmation from international creditors that in 2009 they will not reduce the credits granted to private legal persons in Serbia.

Jaeger stated that, in the event those conditions are not fulfilled, the government and the IMF would have to reconsider the agreed stand-by arrangement.

National Bank of Serbia Governor Radovan Jelasic affirmed that he will meet foreign creditors in Vienna on March 27, and request them not to reduce the Serbian private sector's credit range.

He said that the IMF representatives, who took part in the agreement on the new arrangement with Serbia, will attend the meeting.

Jelasic assessed that in the middle of May 2009, Serbia could withdraw the first installment based on the credit arrangement with the IMF, that a EUR2.2 billion worth loan would be available for use by the end of 2009, and the rest in 2010.

He explained that the new arrangement provided Serbia with 5.6 times more than the quota of the IMF.