Serbian Finance Minister Quits After Completing IMF Reforms

(Bloomberg) -- Serbian Finance Minister Dusan Vujovic, who lead the biggest former Yugoslav republic through a three-year austerity program, stepped down, citing personal reasons.

Vujovic, 66, resigned after “achieving significant results in macroeconomic stabilization, fiscal consolidation and structural reforms during his term,” the government said on its website on Tuesday, citing Vujovic’s letter to Prime Minister Ana Brnabic.

The former World Bank economist will return to the global lender as a consultant, Serbian state TV broadcaster RTS reported, without citing anyone. Vujovic may be replaced by outgoing Belgrade mayor Sinisa Mali, newspaper Novosti said. President Aleksandar Vucic said his party would be ready to support Mali if Brnabic makes such a proposal.

“Four years in a democracy is a reasonable period for a person to prove himself in public office and I would like to withdraw from the office of the finance minister for family, personal and professional reasons,” Belgrade newspaper Blic cited Vujovic’s letter to Brnabic.

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Vujovic took office in August 2014 in the government of then-Prime Minister Vucic, leading the country through an International Monetary Fund program that cut state spending and turned the biggest budget gap in Europe of 8.7 percent of economic output in 2014 to a surplus in 2017. Brnabic has been considering reshuffling her cabinet, though those plans had already faced delays before Vujovic quit.

For now, Vujovic’s departure does not spell trouble for Brnabic’s government and there are no signs of early parliamentary elections looming “at least over a several months’ horizon,” Milan Nikolic, the director of the Center for Policy Studies in Belgrade, said by phone. “Vujovic may have decided to leave out of discontent with some economic policy aspects as he might not have fully agreed with a policy that relies on state interventions and promises of higher wages and pensions."

The lack of a significant market move showed how well Vujovic had managed to stabilize the economy, said Tim Ash, a strategist at BlueBay Asset Management in London. “He has done a terrific job in putting Serbia’s finances on a sounder footing," Ash said. "His replacement looks a little more controversial."

Mali, the potential successor, is Vucic’s close ally and served as his economic adviser during his time in office as deputy prime minister. He is also chairman of Air Serbia’s supervisory board and has overseen the construction of the Belgrade Waterfront, a controversial commercial and residential development on the banks of the Sava River, backed by Vucic and investors from the United Arab Emirates.

“As long as another deal with the IMF is signed there are no material reasons to worry,” said Ciprian Dascalu, ING economist in Bucharest. Serbia and the IMF began talks Monday on a new non-financial, advisory program to help the country go ahead with pledged structural reforms and boost growth.

To contact the reporters on this story: Gordana Filipovic in Belgrade at gfilipovic@bloomberg.net, Misha Savic in Belgrade at msavic2@bloomberg.net.

To contact the editors responsible for this story: Andrea Dudik at adudik@bloomberg.net, Andras Gergely, Elizabeth Konstantinova

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