Serbia’s fiscal position appears relatively comfortable at first glance. Public debt remains below 45% of GDP, annual deficits are contained near €3 billion, and economic growth is expected to accelerate during the second half of the decade.
Yet one of the most important sections of the fiscal strategy focuses on a less visible source of risk: state-owned enterprises.
While government finances attract the greatest public attention, the balance sheets of major state companies increasingly influence fiscal stability, infrastructure delivery and long-term debt dynamics.
The list is familiar.
Elektroprivreda Srbije (EPS), Srbijagas, Elektrodistribucija Srbije, Infrastructure of Serbian Railways, Srbija Voz, Resavica and several transport-related entities remain deeply embedded in the country’s economic architecture.
Collectively, they manage strategic infrastructure worth billions of euros. They also receive substantial support through subsidies, guarantees and state-backed financing arrangements.
The fiscal strategy reveals that subsidies to monitored state-owned enterprises reached approximately €530 million in 2024. While lower than in previous periods of energy-market turbulence, the figure highlights the continuing dependence of certain enterprises on public support.
The larger issue concerns guarantees.
Planned guarantees exceed €3.1 billion, with approximately €2.36 billion linked to EPS alone. Such guarantees are intended to support investment rather than operating losses, representing a significant improvement in fiscal discipline. However, they also create contingent liabilities that may eventually migrate onto the public balance sheet if projects encounter financial difficulties.
EPS occupies a particularly important position.
The utility is simultaneously expected to modernise generation assets, invest in renewable energy, expand battery storage capacity and maintain energy security. Achieving these objectives requires unprecedented levels of capital expenditure.
Success would strengthen Serbia’s energy system and improve long-term competitiveness. Failure would expose the state to significant financial obligations.
The railway sector presents a different challenge.
Rail infrastructure remains heavily dependent on public financing despite substantial investment in modernisation. While the economic benefits of improved connectivity may justify continued support, the sector remains a recurring consumer of fiscal resources.
Resavica represents another longstanding issue.
The state-owned coal mining company continues to require support despite repeated restructuring efforts. The challenge reflects broader tensions between social policy, regional employment and economic efficiency.
What makes these risks particularly important is their interaction with the broader investment cycle.
The government is simultaneously pursuing ambitious infrastructure programmes, energy-transition projects and EXPO-related developments. Many of these initiatives rely directly or indirectly on state-owned enterprises.
As a result, fiscal performance increasingly depends not only on tax revenues and economic growth but also on the operational effectiveness of publicly owned companies.
This is a familiar challenge across emerging European economies. State-owned enterprises often serve strategic functions that private investors are unwilling or unable to perform. At the same time, they can become channels through which fiscal risks accumulate outside the formal budget.
Serbia’s approach appears increasingly focused on investment-led restructuring rather than simple subsidy support. Guarantees are being directed toward capital projects, energy transition initiatives and infrastructure upgrades.
Whether that approach succeeds will shape the country’s fiscal outlook far more than annual budget debates.
The real test is not whether state-owned enterprises can continue operating. The real test is whether they can generate sufficient productivity, efficiency and returns to justify the growing financial resources being committed to them.
