MOSCOW, Jan 11 (Reuters) - Serbia has asked Moscow for an additional $1 billion loan this year to stabilise its budget, Russia's Finance Minister Anton Siluanov said on Friday.

Like much of the western Balkans, Serbia has slid back into recession this year, due to declining trade and investment from the crisis-hit euro zone and a harvest hit by drought.

'We have agreed together to look at (Serbia's) medium-term budget plans,' Siluanov told journalists.

'In order to make a decision, more work is needed ... We have agreed to touch base on the issue in a few weeks.'

On Friday, Russia and Serbia signed an agreement on a previously approved $800 million five-year credit line from Moscow to overhaul Serbia's railways.

The loan, carrying an annual interest rate of 4.1 percent, will support Serbian infrastructure projects including railway construction and maintenance.

Serbia has borrowed heavily to finance its budget deficit, seen at 6.2 percent of gross domestic product (GDP) by the end of 2012. Its debt burden was expected to reach 60 percent of GDP by year-end under a revised 2012 budget.

It has pledged to cut its deficit to 3.6 percent of GDP in 2013 and keep debt in check to secure a three-year precautionary loan with the International Monetary Fund to reassure investors.

(Reporting by Darya Korsunskaya; Writing by Lidia Kelly; Editing by Megan Davies and Susan Fenton) Keywords: RUSSIA SERBIA/LOAN

(lidia.kelly@thomsonreuters.com)(+7 495 775 1242)(Reuters Messaging: lidia.kelly.reuters.com@reuters.net)

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