How high are interest rates that Serbia pays on Chinese loans?

This year, the Serbian government will have to pay 178 million dollars for the payment of Chinese loans and this does not include the loans we have just taken. There is often a debate about whether China’s debt is a good economic opportunity or a noose around the country’s neck.

Nikola Stakić, a professor at the Singidunum University, says that Serbia is not over-indebted to China, but has been borrowing more and more from Chinese creditors. According to the latest data, the debt currently stands at around 3.7 billion euros.

“That is about 15 per cent of Serbia’s external debt and what is perhaps really indicative when we look at the statistics is that, for example, we currently owe 2.6 billion euros to the Chinese Exim Bank and that is our single largest creditor,” Professor Stakić says.

He adds that loans from China are more flexible and available to Serbia and there is no need to go through complicated procedures or submit project documentation, i.e. everything that European banks demand before being approved a loan. On the other hand, the disadvantage of loans from China is that there is no adequate transparency.

Stakić states that the interest rates on loans taken from Chinese creditors are “very diverse”.

Serbia’s debt to China has increased 12 times in the last 10 years, from 305 million to 3.7 billion euros, Radio Free Europe (RSE) reported based on data it received from the National Bank of Serbia (NBS).

In the past ten years, loans were taken for infrastructure projects, which, due to the lack of transparency from the very beginning, are still under the scrutiny of the European Union (EU).

According to Branimir Jovanović, from the Vienna Institute for International Economic Studies, the debt situation is not yet worrisome, but “one should be careful”.

(Forbes, 13.05.2024)

This post is also available in: Italiano

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