Finance Minister Siniša Mali announced that funding has been secured for a housing loan program aimed at young people, which includes a guarantee scheme worth 400 million euros. The government plans to adopt the bill for the program after Christmas, with the aim of having it passed by parliament by early February. The program, which will launch in March 2025, offers young people between the ages of 25 and 35 the opportunity to apply for housing loans with favorable conditions, including no penalties for early repayment.
Minister Mali emphasized that the loans would carry no additional costs and explained that the state would cover a significant portion of the loan costs. The government will invest 130 million euros into the program to assist with down payments and subsidize interest rates. Under the scheme, the state guarantees the loan to the bank, reducing the risk for the financial institution and allowing for more favorable lending terms for young borrowers.
For instance, for a residential property valued at 75,000 euros, the loan would require a down payment of just one percent instead of the typical 20 percent required under market conditions. Furthermore, the state will contribute 124 euros per month for each loan beneficiary, effectively reducing the amount young people need to repay.
Mali explained that the program is designed not only to assist young people in purchasing their first property but also as an economic measure that will stimulate the construction industry. This, in turn, is expected to have a ripple effect on related sectors such as furniture, construction services, and more, contributing to economic growth.
In addition to the housing loan program, Mali highlighted Serbia’s overall economic performance, including a 4% GDP growth rate for the first nine months of 2024. The country has also made significant strides in attracting foreign investments, with 5.1 billion euros in inflows, and more than 60% of foreign investments in the Western Balkans coming to Serbia. Mali noted that Serbia is on track to achieve an investment rating for the first time, a key milestone for the country’s financial stability.
He also mentioned that Serbia’s investment credit rating, obtained from Standard and Poor’s, could soon be complemented by ratings from Fitch and Moody’s, which would further enhance Serbia’s standing in international markets. This would reduce financing costs, lower interest rates, and stimulate further investments, thereby creating more jobs, increasing salaries, and improving living standards.
Mali announced that public sector salaries have already been increased by 8%, with educators receiving an 11% raise. Pensions were also increased by 10.9% in December, and the minimum wage will rise by 13.7% to 457 euros in January 2025. Additionally, the average salary in Serbia is expected to surpass 1,000 euros by the end of 2025.
Serbia’s economic growth is also attributed to strategic investments in key infrastructure projects, such as roads, railways, hospitals, and energy. The country is focusing on reducing its dependence on imports while increasing exports, benefiting from free trade agreements with China, Egypt, the UAE, South Korea, and other countries. Mali highlighted that Serbia’s economy is rapidly approaching the European Union’s standards, with growth in various sectors including food production, tourism, trade, and industrial services.
Looking ahead, Mali expressed optimism about Serbia’s economic future, projecting a GDP growth rate of 4.2% in 2025, positioning the country as one of the fastest-growing economies in Europe. He emphasized that Serbia’s development is based on increasing wages, pension benefits, and public investment, while also fostering a business-friendly environment that encourages foreign investment.
Addressing the impact of global political changes, including the potential shift in U.S. policy under a new administration, Mali stressed that Serbia’s goal is to navigate global tensions and continue its path toward European integration. Serbia remains committed to fulfilling the necessary requirements for EU membership by 2026, while ensuring stability and peace in the region.
In conclusion, Mali reassured that Serbia will continue to focus on strengthening its economy through strategic investments, reforms, and maintaining a stable and peaceful environment. As President Aleksandar Vučić said, Serbia will not back down in the face of challenges.