Ex-McKinsey consultant becomes Serbian finance minister, eyes IMF deal
Serbian lawmakers endorsed 29-year-old former McKinsey consultant Lazar Krstic as finance minister on Monday, handing him the task of reining in the country's ballooning deficit and public debt.business Updated: Sep 03, 2013 03:15 IST
Serbian lawmakers endorsed 29-year-old former McKinsey consultant Lazar Krstic as finance minister on Monday, handing him the task of reining in the country's ballooning deficit and public debt.
Krstic brings no political pedigree to the job but was handpicked by the Serbian Progressive Party (SNS), the biggest party in Serbia's ruling coalition.
The Yale graduate was endorsed as part of a cabinet reshuffle passed by 134 votes to 65 in the 250-seat parliament. The SNS says it is serious about pursuing painful reforms and spending cuts to stabilise Serbia's finances, and has threatened its Socialist coalition partners under Prime Minister Ivica Dacic with a snap election if they resist.
Krstic has pledged to seek a new loan deal with the International Monetary Fund, which will probably require long-resisted cuts in spending on pensioners and state enterprises to curb a budget deficit of at least 4.7 percent of national outout and public debt projected at 65 percent by year-end.
Pensioners and the public sector account for about one third of the Serbian electorate and half its outgoings. The IMF has said that without significant reform Serbia's budget shortfall will reach eight percent of gross domestic product.
The Fund froze an earlier 1 billion euro ($1.3 billion) standby loan deal with the former Yugoslav republic early last year over broken spending promises by the previous government. The absence of an IMF safety net has pressured the Serbian dinar and driven up borrowing costs.
Serbia, a candidate for membership of the European Union, emerged from recession in the first quarter of the year, but growth remains fragile.