(Incorporates SERBIA-IMF/FUNDING, adds details)
BELGRADE, Feb 10 (Reuters) - The widening impact of the world financial crisis is forcing Serbia to seek additional financing and spending cuts, the deputy head of the International Monetary Fund said on Tuesday after meeting leaders in Belgrade.
The statement by Murilo Portugal, the highest ranking IMF official to visit Serbia in 20 years, was the latest evidence that the Balkans are taking a worsening blow from the worldwide recession despite fewer links to global financial markets.
"We think that circumstances are such that they (Serbia) will require more financing and more adjustment," Portugal told reporters.
In January, the global lender approved a $520 million stand-by loan for Serbia. Authorities had said that programme would primarily serve to reassure foreign investors that Serbia's economy was stable and its policies and reforms on track.
World "economic developments are set to further undercut budgetary revenue and lead to a wider fiscal deficit," Portugal said after meeting Serbian leaders. "Given the limited scope for mobilising additional financing, new fiscal adjustment measures will be needed to close much of the gap, entailing difficult choices."
The Serbian central bank governor said last week that Serbia would need 7.5 billion euros in foreign funding to finance its deficits and new borrowing to close the balance of payments.
Earlier on Tuesday, the Serbian prime minister's office said it was ready to change the nature of its stand-by loan deal with the IMF as part of a revised response to the global economic crisis. "Together with the IMF representatives, Serbia is ready to again analyse the current situation and effects of the crisis on Serbia in order to take adequate measures, which could mean the change in the nature of the IMF loan deal," the statement said.
The statement, which offered no other detail, was issued after Prime Minister Mirko Cvetkovic met the IMF's Portugal.
Analysts had said that Serbia would need to draw at least 2.0 billion euros from the IMF to close the balance of payments gap and back the dinar currency.
Investor flight from east Europe's assets has led the dinar 25 percent down since the start of October, while official hard currency reserves and foreign capital inflows fell sharply, forcing the central bank to close the balance of payments from its own reserves. (Reporting by Gordana Filipovic and Aleksandar Vasovic; writing by Adam Tanner; editing by Stephen Nisbet)