At the end of last year, Serbia’s total external debt reached 45.4 billion euros, with over half, amounting to 24.7 billion euros, attributed to public debt, as reported by Biznis i finansije magazine. The Association of Banks of Serbia (UBS) provides the closest insights, recording the credit obligations of both the economy and the population. As of April 30 this year, these obligations totaled 30.8 billion euros, according to Business and Finance.
The largest share belongs to companies, totaling around 17.1 billion euros, closely followed by the population with liabilities amounting to 13.1 billion euros. Entrepreneurs have the smallest share, having borrowed 626 million euros.
In total, Serbia’s private sector accounts for external and internal debts totaling 51.5 billion euros.
Comparatively, a year earlier, Serbia’s external debt stood at 41.9 billion euros, comprising 22.2 billion euros in public debt and 19.7 billion euros in private debt from companies (approximately 15.5 billion euros) and banks (close to 3.8 billion euros). Domestic credit indebtedness amounted to 28.5 billion euros.
Veroljub Dugalić, a professor at the Faculty of Economics in Kragujevac, highlighted that private internal debt encompasses taxes and outstanding obligations of communal and public companies. The data on internal indebtedness, derived primarily from UBS’s credit bureau, reflects loans, credit card debts, and leasing obligations.
Dugalić emphasized the critical impact on the financial, monetary, and economic systems if entities or citizens fail to meet their financial obligations. According to UBS data, the delay in repayment for legal entities decreased from 3.1 percent to 2.6 percent in April compared to the previous year, and for individuals, it dropped from 2.4 percent to 2.3 percent. Conversely, among entrepreneurs, the proportion increased from 5.2 percent to 6.1 percent, though their borrowing levels are lower compared to legal entities and individuals, which mitigates the overall risk to creditors and the financial system.
Dugalić noted the disproportionate impact on small entrepreneurs during economic challenges, highlighting their vulnerability in accessing loans or restructuring opportunities. He underscored that while an overall arrears level of two to three percent is manageable, a sustained increase in indebtedness could signal underlying issues within the financial and economic framework.
Professor Dejan Šoškić from the Faculty of Economics in Belgrade cautioned that high levels of private debt could potentially jeopardize Serbia’s financial stability, citing Slovenia’s past instability stemming from similar private debt issues. He stressed the importance of vigilance and monitoring vulnerable points within the financial system to safeguard overall financial stability.
