BELGRADE - International Monetary Fund and Serbian authorities have reached an agreement for 2.4 billion euro ($2.37 billion) loan deal over the next two years, the lender said in a statement on Wednesday.

"This arrangement would help address emerging external and fiscal financing needs given the challenging global economic environment and support the authorities’ macroeconomic policies and structural reform efforts, with a focus on the energy sector," the IMF said in the statement.

It said Serbia's gross domestic product growth is due to slow down to 2.5% this year and 2.25% in 2023 due to war in Ukraine. Inflation which stood at 14% year-on-year in September is expected to slow down next year.

The fund said Serbia will need to limit public sector wages and maintain high capital expenditure to address infrastructure needs to be able to draw funds.

“Exceptional uncertainty dominates the near-term outlook with risks mostly to the downside,“ the IMF said.

“Yet, the Serbian economy has the buffers to withstand these risks, including adequate foreign exchange reserves, moderate external and public debt levels, a well-capitalised and liquid banking system, and a track record of timely policy responses to various shocks,“ it said.

($1 = 1.0107 euros)

(Reporting by Ivana Sekularac Editing by Peter Graff)