By Maja Zuvela
NOVI SAD, Serbia (Reuters) - Yale-graduate Lazar Krstic will remain as Serbia's finance minister in the new government led by the centre right Serbian Progressive Party (SNS), while a former World Bank expert will be economy minister, a senior party official said on Friday.
The appointment of the two experts will send a strong signal to investors that the government, due to be sworn in on Sunday, is serious about the promised reform of the oversized public sector, labor market and privatization.
SNS leader Aleksandar Vucic was given a mandate to form the government following a landslide victory in the March 16 elections. On Friday afternoon he presented his cabinet to his party main board for approval.
He is due to present his program and cabinet to parliament on Sunday morning and a vote is expected later.
"The (SNS) main board gave a full support to the future prime minister to form the government and start serious reforms," Nebojsa Sefanovic, who is nominated to be interior minister, told reporters.
The SNS had won 158 seats in a 250-seat parliament in the March 16 elections, but has offered posts to the Socialist Party of the ex-Prime Minister Ivica Dacic and several non-party technocrats.
Future economy minister Dusan Vujovic, a lecturer at the Faculty for Economics, Finance and Administration in Belgrade, had previously worked for the World Bank in Ukraine and Washington and is not affiliated with any party, like Krstic.
Kori Udovicki, a former central bank governor, will run the ministry for public administration.
Vucic had said earlier that Krstic would remain as finance minister.
The new administration, which will continue accession talks the European Union launched with Serbia in January, will have 15 ministries.
Vucic said the government would seek a new deal with the IMF, which should reassure investors that it will be committed to reforms.
Before any deal is concluded, the government will have to take steps to curb the public sector, reform the ailing pension system and cut subsidies to loss making state-owned companies.
Successive governments have fudged any attempt to downsize the public sector, which employs nearly 800,000 people, fearing that job losses could cause social unrest in the already impoverished country.
Serbia's consolidated deficit is set at 7.1 percent of the gross domestic product (GDP) but economists warn it could be even higher if the government delays spending cuts.
The public debt has reached 63 percent of GDP in February, higher than IMF recommends for similar economies.
"The positive news is that the new cabinet will mostly be run by non-partisan experts," Uncredit said in a note on Thursday.
(Reporting by Maja Zuvela, Writing by Ivana Sekularac, Editing by Angus MacSwan)