Serbia began 2026 with a moderate reduction in its public debt ratio, as government liabilities declined relative to the size of the economy. According to official data, the country’s public debt at the end of January stood at about €39 billion, equivalent to 41.3 % of gross domestic product (GDP).
The figure marks an improvement compared with the end of December 2025, when public debt amounted to €39.35 billion or 44.4 % of GDP. The decline indicates that the ratio of government debt to economic output fell at the beginning of the year despite the nominal level of debt remaining relatively stable.
Looking further back, the trend also reflects a gradual reduction in Serbia’s debt burden over the past year. At the end of 2024, public debt stood at approximately €38.9 billion, corresponding to 46.7 % of GDP. The latest data therefore show a continued downward movement in the debt-to-GDP ratio as economic growth expands the country’s nominal output faster than the increase in government borrowing.
From a fiscal policy perspective, the current level of public debt remains comfortably below the 60 % of GDP threshold defined by the Maastricht criteria used within the European Union as a benchmark for fiscal sustainability. For emerging economies such as Serbia, maintaining debt well below that threshold is generally considered important because borrowing costs are typically higher than in advanced EU economies.
The improvement in the debt ratio also reflects broader fiscal dynamics in Serbia’s public finances. Strong economic activity, rising tax revenues and continued investment flows have supported budget revenues in recent years. At the same time, the government has relied on a combination of domestic bond issuance and international borrowing to finance infrastructure investment and development projects.
However, the absolute level of debt close to €39 billion still reflects the growing scale of public investment undertaken by the state, particularly in infrastructure, transport corridors and energy projects. Serbia has significantly increased capital expenditure over the past decade as part of a strategy to modernise transport networks, energy infrastructure and industrial zones while preparing for major international events such as Expo 2027 in Belgrade.
For policymakers, the central challenge remains balancing investment needs with fiscal sustainability. Maintaining a declining debt-to-GDP ratio requires economic growth to remain robust while new borrowing is kept under control. In practice, this means that large infrastructure projects must increasingly rely on mixed financing structures involving international financial institutions, export credit agencies and private investors rather than relying solely on sovereign borrowing.
The latest debt data therefore suggest that Serbia currently retains fiscal space relative to many European economies, where debt levels often exceed national output. Yet the sustainability of this position will depend on the government’s ability to maintain economic growth and manage borrowing as large-scale infrastructure and energy investments continue over the coming decade.
