Recent government decisions reallocating significant funds from the 2025 budget reserve have sparked worries about transparency and fiscal discipline in Serbia. Although the Ministry of Defense lost over 5 billion dinars through two such reallocations this year (March and May), this accounts for only about 2% of its total annual budget—relatively minor in scale.
However, the growing pattern of the government frequently tapping into the budget reserve to shuffle money between ministries and projects—sometimes on a near-weekly basis—is notable. The latest decision on May 22 moved over 11 billion dinars from various ministries, agencies, and institutions into the reserve. The official reasoning cites the need to cover unforeseen expenses that were not anticipated during the original 2025 budget planning.
What remains unclear is exactly how and where these funds will be spent, as no detailed explanation accompanies these transfers in the Official Gazette. This lack of clarity fuels criticism. The Fiscal Council of Serbia has previously warned that such large, frequent reallocations are often opaque and could undermine fiscal accountability.
Notable cuts included 3.4 billion dinars from the Ministry of Defense (mainly operational funding), 2 billion from the Ministry of Construction, and another 2 billion from the Ministry of Trade to support the EXPO 2027 project. Infrastructure projects also faced losses: over 400 million dinars taken from the Iverak–Lajkovac road, nearly 200 million from the Požarevac–Golubac road, and 100 million from the new Belgrade port project. The “Clean Serbia” initiative, focused on waste management infrastructure, was the hardest hit with a 1 billion dinar cut.
Even sensitive public administration bodies were affected, such as the Tax Administration losing over 113 million dinars initially earmarked for tax control and collection.
International best practices generally prohibit or strictly limit such mid-year budget reallocations without parliamentary approval, especially for new programs or shifting funds between unrelated ministries. The Fiscal Council recommends reducing the size of the budget reserve to about 2% of total revenues (down from the current 4%) and clearly defining permissible uses to improve transparency and fiscal control.
In summary, while some flexibility in managing unforeseen expenses is normal, the frequency, scale, and opacity of these budget reserve reallocations in Serbia raise concerns about proper oversight and long-term fiscal stability.
