The level of public debt in Serbia should not exceed 60% of the national GDP, which is one of the reasons why the state does not have much room for manoeuvre to borrow more money and help the economy further.
The 60% limit is set by the Maastricht criteria, approved in 1991, in the then European Community. It refers to the maximum level of debt that countries may have to be candidates for membership of the Eurozone, i.e. monetary union.
At the moment, Serbia’s public debt is at 57%. Only six months ago, it was at 53% and its growth, among other things, was undoubtedly caused by the state’s decision to take out loans to help the economy and citizens financially.
“The state’s planned debt, to reduce the negative economic consequences of the pandemic on the economy, can be justified in principle. However, it also comes at a high price. It will cost taxpayers more than three billion euro, a cost for which the state currently has no funds available and for which it must get heavily indebted in a short period of time,” the Fiscal Council assessed at the time the measures were announced. The Council has also repeatedly criticized the state’s decision to give each Serbian citizen over the age of 18 a one-off financial assistance in the amount of 100 euro.
The State is now in a situation where it does not have enough room for manoeuvre to take out new loans, and does not want to increase its debt.
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“The level of public debt will never exceed 60%. Don’t forget that Italy and France have a public debt of over 100%. Both Slovenia and Croatia have a higher public debt rate than Serbia,” President Aleksandar Vucic recently said.
Croatia’s public debt is currently at the level of 73% of GDP and Slovenia at 70%.
According to data from the Ministry of Finance, Serbia’s public debt amounted to €24.12 billion or 52.4% of GDP at the end of November 2019. Previously, at the end of October, the state was 23.97 billion euro (52% of GDP) in debt and at the end of 2018, the public debt amounted to 23.01 billion euro or 53.7% of the GDP.
The lowest share that the public debt had in the national GDP (28.3%), was recorded in 2008 and the highest in 2000, when it amounted to 201% of GDP.
Serbia’s public debt grew continuously from 2008 to 2015, after which it started to decrease.
This post is also available in: Italiano