Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic said that the World Bank yesterday approved a $200 million loan to Serbia as budget assistance, adding that this is the first direct result of the successful negotiations held with the IMF.

EconMin Dinkic said that the basic condition for acquiring the World Bank loans was a successful conclusion to talks on the review of the stand-by arrangement with the IMF.

He said that the loan will prove useful for covering the budget deficit, adding that next year Serbia will get another tranche of $200 million, which is good news for the economy.

Head of the World Bank Office in Belgrade Simon Gray said that the $200 million loan is for two purposes, one part is for supporting public sector reform and the other part is for improving the business climate in Serbia.

The World Bank will approve a total of approximately $450 million to Serbia for supporting the budget, of which some $50 million was approved in May this year, $200 million was approved today and another $200 million will be approved next year.

This year the World Bank also approved a special $388 million loan to Serbia for financing the construction of transport Corridor 10.

The Second Programmatic Private and Financial Development Policy Loan Project for Serbia aims to support reform in three policy areas:(i) enhancing business-enabling environment to encourage new private sector investments;(ii) strengthening financial discipline by enforcing hard budget constraints and continued reform of enterprise sector and public utilities; and (iii) building a more efficient and stable financial sector through continued restructuring of state holdings in banking and insurance sectors, enhancing crisis preparedness, and encouraging development of the capital markets.