On the last day of February this year, Serbia’s public debt amounted to 34.94 billion euros, which is the highest absolute amount of public debt since 2000.
The largest part of the debt is external debt in the amount of 22.3 billion euros, 11 billion is internal public debt, and 1.7 billion is indirect state debt.
Compared to December 31, 2022, the public debt has increased, according to the data of the Ministry of Finance, by 1.6 billion euros.
However, while at the end of the year, the public debt made 55.1% of the national GDP, at the end of February, after additional borrowing, it fell to 51.1% of the GDP.
The Serbian Ministry of Finance is counting on real GDP growth of 2.5 percent this year, while the other 10.5 percent is a result of inflation.
At the same time, if we assume that the euro/dinar exchange rate will be stable, it means that the GDP in euros will increase by more than 13 percent, that is, by about eight billion euros.
Milojko Arsić, a professor at the Faculty of Economics in Belgrade, points out that this methodology of showing public debt against GDP is unusual because other countries compare public debt to GDP in the previous four quarters.
“By using this methodology, we saw a sudden drop in indebtedness at the beginning of the year, because the state compares the public debt against the assumed GDP, which has yet to be realized by the end of the year. They also assume both real growth and inflation in that year. That’s why, with this methodology, the only relevant data about the public debt is the one that is calculated at the end of the year,” Arsić adds.
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