IMF three-year loan is approved for FYROM

WASHINGTON (Reuters) – The International Monetary Fund on Thursday approved a new three-year 61.1-million-euro loan for the Former Yugoslav Republic of Macedonia (FYROM) and agreed to reschedule the country’s repayments as the country seeks to ween itself off IMF aid. The government of FYROM, lining up for EU membership, has said it does not plan to draw down on the IMF credit line and will treat it as a precautionary loan. While FYROM’s inflation is close to zero and fiscal discipline has kept its debt ratio down, economic growth is weak and unemployment high, the IMF said in a statement. «The authorities of the Former Yugoslav Republic of Macedonia are to be commended for their sound macroeconomic policies,» said Takatoshi Kato, the IMF’s deputy managing director. Under a new economic agenda, FYROM plans reforms that aim to boost gross domestic product growth to 4.5 percent in 2007 from less than 3 percent annually since 2003. The reforms will target the country’s labor market and competitiveness by tackling impediments to business. Monetary and fiscal policy will be focused on keeping inflation down, increasing international reserves and narrowing the country’s current account deficit, the IMF said.