Serbia gets loan deal with International Monetary Fund after pledges to rein in deficit, debt

The Serbian prime minister says his government has secured an agreement with the International Monetary Fund on a standby loan after promising to slash public spending and rein in debt.

The three-year deal was reached Thursday after Serbia agreed to narrow the budget deficit from 8 percent to 3 percent of economic output by 2017 by cutting public wages and pensions and reducing subsidies to unprofitable state companies.

Prime Minister Aleksandar Vucic says the agreement "is great news for Serbia" after years of avoiding economic reforms.

In 2012, the IMF froze its program with Serbia after the former government, facing elections, provided subsidies to loss-making state enterprises and failed to meet fiscal targets set by the lender.