The Government of Serbia has decided to reallocate 11 billion dinars, or approximately 94 million euros, from various state projects to cover expenses that were not identified when the national budget was adopted. This decision was made one day after President Aleksandar Vučić announced plans to increase pensions and salaries. However, the government decision does not indicate whether these two events are connected, as no explanation has been provided.
According to the published decision, exactly 11,014,673,000 dinars will be redirected to the Ministry of Finance, specifically to the budget reserve. The official reason given is to finance costs and expenditures that were unknown during the process of drafting the 2025 Budget Law for the Republic of Serbia.
The decision does not specify how the money will be spent. By the time this report was published, the Ministry of Finance had not provided an answer to that question.
Marko Milanović, a special adviser at the Fiscal Council, stated that the Council has repeatedly highlighted concerns about how the current budget reserve is being used. He pointed to issues such as the unjustified use of this mechanism for funding regular government policies, limited transparency in explaining specific allocations, and unclear criteria for deciding how the funds are distributed.
Milanović emphasized that these are not new problems. The Fiscal Council has long advocated for restrictions on the use of the reserve and stronger oversight and transparency in reporting how it is used.
He noted that the May 22 decision involves the allocation of funds into the current reserve, but not their distribution to specific budget users or programs. As a result, the final purpose of the funds remains unknown.
The government’s decision shows that money will be diverted from a number of institutions, including ministries, local governments, and the Agency for the Prevention of Corruption.
The largest amount is being taken from the Ministry of Defense—3.4 billion dinars—which was intended for several unspecified purposes.
Two billion dinars, initially allocated to the Ministry of Trade for supporting the implementation of EXPO Belgrade 2027, will also be redirected to the budget reserve.
One billion dinars meant for the construction of sewage systems and municipal waste disposal infrastructure through the Ministry of Construction is being reallocated. Other construction-related projects affected by the decision include 280 million dinars from bypasses and tunnels, 430 million dinars from the high-speed road Iverak-Lajkovac, 100 million dinars from the new port in Belgrade, and 190 million dinars from the E-75 Požarevac-Golubac interchange.
An additional 200 million dinars will be diverted from the Fund for Innovation Activities.
More than one million euros (165.5 million dinars) originally meant for the formation and maintenance of mandatory reserves of oil, oil derivatives, and natural gas will also be redirected.
The Security Intelligence Agency (BIA) is not exempt from the cuts either, with 56.4 million dinars being removed from its budget, though the intended use of those funds was not specified.
New Economy contacted the institutions most affected by the reallocation to ask how the decision would impact their operations, but no responses were received before publication.
The government’s decision to reallocate funds was signed by Prime Minister Đuro Macut on May 22.
A day earlier, President Aleksandar Vučić announced on TV Pink that pensions and the minimum wage would be increased. He stated that pensioners would be pleased because they would receive a significant pension increase by the end of the year, adding that this was necessary because pension growth had not kept up with salary increases.
Vučić also said that, if his plans are accepted, the average salary in Serbia by December 2026 would be 1,147 euros, and could reach 1,400 euros by the end of 2027. Experts, however, consider this projection unrealistic and caution against encouraging employers to pay only minimum wages.
Marko Milanović said that, at this point, the real purpose of the reallocated funds can only be speculated on, and he would not immediately connect it to the president’s statements about increasing pensions.
He added that this is just one of several similar reallocations made since the beginning of the year, where significant sums were collected from many budget users and moved into the current reserve. For example, a February decision clearly created room for increasing educators’ salaries after negotiations between the government and unions. In the latest case, however, there is no indication of the intended use.
The fiscal year is still ongoing, Milanović said, and there will likely be more cases of reserve usage, as well as a budget rebalance at some point, which would allow for new funding limits to be set.
He concluded that the current decision to reallocate money from a particular project or institution does not mean those funds are permanently lost. Later decisions or a revised budget could restore or further reduce their funding.
