June 24, 2020 / 12:03 PM / 15 days ago

Serbian state-backed pandemic loan demand nears 1 billion euros

BELGRADE, June 24 (Reuters) - Demand for state-guaranteed loans to help Serbian firms weather the coronavirus crisis reached almost 1 billion euros ($1.13 billion), Finance Minister Sinisa Mali said on Wednesday.

In April the Serbian government approved bank guarantees worth 2 billion euros for cheap loans as part of a wider 5.1 billion euro pandemic package.

So far banks have approved 6,322 three-year loans with a grace period of between nine and 12 months, while the total value of approved loans is 526 million euros, Mali said.

“They are working on approving requests for another 3,449 loans with a total value of 453 million euros,” he added.

The International Monetary Fund and the World Bank have both forecast that Serbia’s economy will miss its 4% growth target for 2020 and face a recession, but it should rebound in 2021.

The recovery programme would lead to an increase in the deficit this year of up to 7% of economic output that would be covered from financial reserves and borrowing. The budget shortfall was originally forecast at 0.3% of economic output.

The coronavirus has killed 263 people among 13,092 confirmed cases in Serbia, which has a population of 7.2 million. ($1 = 0.8854 euros) (Reporting by Aleksandar Vasovic; Editing by Alexander Smith)

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