The Draft Law on the Final Account of the 2025 Budget is currently before members of parliament. Spanning over 700 pages, it includes a table detailing expenditures from the current and permanent budget reserves. As unwieldy as in previous years, it lacks clear insight into the total sum of taxpayers’ money redistributed by the government throughout the past year.
In total, this amounts to nearly 93 billion dinars, or €790 million calculated at that year’s average exchange rate. In other words, last year the government allocated almost €800 million – €80 million more than in 2024 – without any parliamentary oversight or debate, giving it to whichever recipients it deemed necessary. This was carried out through an instrument meant to serve strictly as a reserve for exceptional and unforeseen circumstances.
According to the tables, the largest individual amounts went to security sector departments – specifically for tasks classified as confidential. As a result, there is no explanation provided regarding what the money was spent on or for what purposes.
Instead of greater transparency – which was also a criticism raised by the International Monetary Fund (IMF), currently months behind in publishing its analysis of the fiscal transparency of Serbian public finances – there has been an increase in the amount spent through the current budget reserve.
Too much money, too little clarity
The Fiscal Council raised its strongest objections regarding expenditure in its assessment of the Final Account Law. Among other points, they state that nearly 93 billion dinars was spent through the current budget reserve, representing 3.95% of the total revenue and receipts planned in the budget.
An additional issue is that out of those 93 billion dinars, only 4.8 billion was allocated from the amount initially planned as the current budget reserve. The remaining money – amounting to 88 billion dinars – was actually spent through reallocation. Specifically, funds were first transferred from a specific budget line into the current reserve, and then allocated from the reserve for another purpose.
“The Law on the Budget System sets a maximum limit of 4% of annual revenues and receipts. The limit was respected this year in that sense. However, these are large funds distributed without any parliamentary oversight. That is why the Fiscal Council recommended reducing the maximum allowed reserve amount,” they state in their evaluation.
Furthermore, this final account shows that realized budget revenues were lower than initially planned – specifically by 43.3 billion dinars.
“For the first time in a long while, realized revenues were lower than budgeted, while the reserve was calculated at 4% of planned revenues.”
Although there has been progress in reporting on budget reserve spending, the Fiscal Council insists that the final account must “explicitly state, in the form of a summary total, how much funding was allocated from the current budget reserve in a given year. The current method of reporting does not directly provide this information, which is essential for monitoring budget execution and compliance with the law.”
Growth compared to previous years
While last year’s budget revenues fell short of expectations, spending via the budget reserve increased. A comparison with 2024 shows these expenditures grew from €709 million to €790 million, continuing an upward year-on-year trend.
As a reminder, between 2018 and 2023, the government redirected a total of around €2.6 billion through the budget reserve. Moreover, in at least two of those years – 2020 and 2022 – there are clear indications that the legal 4% cap on total budget revenues and receipts was breached.
According to a previous analysis by the Fiscal Council, the actual amount of the budget reserve is even higher, given that complete data for 2019 was never published.
Additionally, nearly a third of this money was spent on reallocations labeled state secret, confidential, and strictly confidential, further decreasing transparency around the spending of taxpayers’ money.
IMF analysis severely delayed
Due to the lack of transparency in budget spending through this mechanism, the IMF announced an analysis of fiscal transparency scheduled for earlier this year. As previously reported, this analysis is expected to point out the core problems with the use of the budget reserve. However, more than six months after the announcement, it has still not been published.
In the meantime, the government initially announced that, aware of the issues, it would specify the criteria for using funds from the budget reserve. This was first outlined in the 2026–2028 Fiscal Strategy, but the reform was subsequently omitted from the revised Strategy. Enhanced transparency and changes to how money is spent through this channel were simply forgotten in that document.
For now, the government benefits from the prolonged delay in the publication of the International Monetary Fund’s findings regarding the main flaws and shortcomings of this discretionary method of redistributing the budget pie – which, as the final account shows, was smaller in 2025 than originally planned.
(Forbes Serbia, 25.04.2026)