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Serbias Progressive Party pledged to form a new government by May 1 after winning an outright parliamentary majority in an election on a pledge to fight graft, fix the economy and join the European Union by 2020.

The party, led by Aleksandar Vucic, who forced the ballot two years earlier than scheduled, won 48.3 percent, more than polls predicted, Serbias Election Commission said today. Vucic will get 158 of the chambers 250 seats, while Prime Minister Ivica Dacics Socialist Party received 13.5 percent, for 44 seats, according to preliminary results. Vucic said he will consult with President Tomislav Nikolic and three other parties that made it into parliament.

Vucic, who was once an ally of late Balkan strongman Slobodan Milosevic, pledged to embrace painful austerity measures endorsed by the International Monetary Fund and lead Serbia into the EU two decades after the bloody Balkan civil wars. He said he will extend a hand to other parties before forming his administration.

There is no time to wait, Vucic told state TV broadcaster RTS. Changes are to be expected both among people from his own party as well as among some coalition partners, if there will be any.

The yield on Serbias 2021 dollar bond fell 13 basis points, or 0.13 percentage point, to 5.46 percent at 12:15 p.m. today in Belgrade, data compiled by Bloomberg show. The main index of 15 most actively traded stocks, Belex15, dropped 0.13 percent to 568.93 points, while the dinar was unchanged at 115.9515 per euro.

Five more parties, including three representing ethnic minorities, crossed the minimum vote threshold to make it into parliament. Final official results will be announced by March 20, according to the Election Commission.

Vucic is counting on billions of dollars of investment from the United Arab Emirates to create jobs in an economy where one in four is unemployed. EU accession also promises to raise living standards and economic output per capita, which at 36 percent of the trading blocs average, trails that of poorest member Bulgaria, according to Eurostat.

The election victory gives the Progressives the strongest lock on power by a single party since the communist days. Nikolic and central bank Governor Jorgovanka Tabakovic are senior members of the Progressives.

Forming a new government quickly will be an important sign for markets as parliament needs to ratify the loan agreement with the U.A.E., Timothy Ash, a London-based economist for emerging markets at Standard Bank Group Ltd., said by e-mail today. Renewing a coalition with the Socialists could raise questions over the commitment to maintain key reforms while delays in clinching a new IMF deal would also be negative.

Vucics critics fear a tendency to wield a powerful hand over institutions may give him too much influence in a country that has received criticism from the EU for weak rule of law and selective justice.

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Serb Progressives to Form Government After Election Win