Fiscal Council: 2024 Budget Deficit Too High for Serbia, It Has to Borrow EUR 6.5 Billion

The state budget deficit for 2024 of RSD 197 billion, or EUR 1.7 billion, which is 2.2% of the gross domestic product (GDP), is too high for Serbia, the Fiscal Council said in the Estimate of the 2024 Budget Proposal.

In 2024, as said, Serbia will have to borrow around EUR 6.5 billion, of which 1.7 billion for the financing of the budget deficit and EUR 4.8 billion for the refinancing of the old debt, which is to become due.

– Although, so far, the Government has managed to respond to this challenge by finding relatively cheap sources of borrowing (IMF, bilateral agreements), that’s not something that can be counted on in the long term. All said risks and challenges are dictating the Government to have the most conservative fiscal policy possible and not to go into economically dubious and unplanned measures – says the Estimate, which will be presented at the Committee for Finance at the National Assembly of Serbia.

As said, a suitable budget deficit for Serbia would be below 1.5% of the GDP. Still, as they estimate, the 2024 budget does make certain steps in the right direction, because the planned budget deficit in 2024 is lower than the one projected for 2023, which is 2.8% of the GDP.

– The budget was formed with the optimistic projections for the acceleration of the GDP growth in 2024 to 3.5% and the slowing down of the average inflation to 4.9%. A slightly lower GDP growth for the next year should have been projected, at 2.5 to 3%, and the inflation at 5.5 to 6% – the council points out and adds that, in 2024, a further reduction of the share of the public debt in the GDP, from 53.3% to 51.7%, is expected, so even though the most important fiscal goals will not be fully reached in 2024, the public finances are being set on the right direction to be achieved in 2025.

– From the angle of individual fiscal policies, the next year’s budget does not bring big changes. A moderate lowering of the budget deficit compared to 2023 will happen almost automatically, and not due to the new fiscal policy measures – estimated the Fiscal Council.

Međunarodni monetarni fond-MMF Beograd

Vlada Republike Srbije

Narodna skupština Republike Srbije

Fiskalni savet Republike Srbije

Elektroprivreda Srbije ad Beograd

JP Srbijagas Novi Sad

International Monetary Fund

IMF

European Commission

Government of Serbia

National Assembly of Serbia

Committee for Finances of the National Assembly

Fiscal Council

deficit

budget

gross domestic product

GDP

fiscal policy

inflation

public debt

economic policy