Serbia’s public debt increased by 370 million euros before the corona

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Serbia’s public debt increased by 370 million euros compared to the end of 2019 to 24.7 billion euros. This increase refers to the period before the outbreak of the pandemic and the economic package of the Government of Serbia of 5.1 billion euros, which will be financed by new borrowing.
The Parliamentary Budget Office published a new study Public Debt Analysis January-March 2020. According to this analysis, Serbia’s public debt increased by 370 million euros compared to December 2019 and now amounts to 24.7 billion euros, or 52.8 percent of GDP.
A significant part of this increase (115 million euros) is due to unfavorable exchange rate differences, while the rest is net borrowing on the domestic market in the amount of 225 million euros.
Public debt is the debt of the state. It consists of direct debt arising from government borrowing (by contracting loans or issuing government securities) and indirect obligations (based on guarantees given).
Most of the debt is expressed through long-term bonds (12.8 billion euros), and less through loans taken from international institutions and foreign governments (9.6 billion euros).
The direct debt of the Republic (created by borrowing) at the end of March 2020 amounted to 22.8 billion euros. Compared to the end of 2019, it increased by 380.9 million euros (that is, if the unfavorable impact of changes in exchange rates is excluded, the direct debt increased by about 264 million euros).
Liabilities on the basis of loans taken increased by 78 million euros, primarily due to the withdrawal of loans from the Chinese Export Import Bank.
Indirect liabilities of the Republic (arising from the issuance of guarantees of the Republic) at the end of March 2020 amounted to 1.5 billion euros. Compared to the end of 2019, they were reduced by 16.4 million euros, mostly thanks to the repayment of the loan of Roads of Serbia.
The analysis of the Parliamentary Budget Office refers to the period before the outbreak of the pandemic and the economic package of the Serbian government from March 31, 2020, which envisages additional spending of 5.1 billion euros (11 percent of GDP).
As the Government of Serbia announced earlier, this package will be financed by borrowing on the domestic and foreign financial markets, which was opposed by the Fiscal Council.
In mid-April, the Serbian government issued the first series of these bonds in the amount of 3 billion euros at an interest rate of 3.375 percent. According to the forecast of the Fiscal Council, after the new borrowing and economic contraction due to the pandemic, the public debt will increase to over 60 percent of GDP, Nova Ekonomija reports.