In Nemanjina 11, they set the level of public debt in Serbia not to exceed 60 percent of GDP, and that is one of the reasons why the state does not have much room for maneuver to borrow and additionally help the economy.
The 60 percent limit is the Maastricht criterion, which was established in 1991 within the then European community. It refers to the level of debt that countries can have to the maximum in order to be a candidate for membership in the Eurozone, ie the currency union, Blic writes.
At the moment, the public debt of Serbia is at the level of 57 percent. Only six months ago, it was at the level of 53 percent, and its growth, among other things, was undoubtedly sponsored by the decision of the state to borrow in order to financially help the economy and citizens.
“The planned large indebtedness of the state to reduce the negative economic consequences of the pandemic on the economy – is justified in principle. However, it also has its high price. It will cost taxpayers over three billion euros, which is a cost for which the state currently has no funds available. That is why it has to borrow heavily in a short period of time,” assessed the Fiscal Council at the moment when the measures were announced, which repeatedly criticized the decision of the state to help the citizens with 100 euros each.
The state is now in a situation where it does not have enough room for maneuver for new borrowing, but also does not want to increase the debt.
According to the data of the Ministry of Finance, the public debt of Serbia at the end of November 2019 amounted to 24.12 billion euros, which was 52.4 percent of GDP. Previously, at the end of October, the state owed 23.97 billion euros (52 percent of GDP), and at the end of 2018, the public debt amounted to 23.01 billion euros, or 53.7 percent of GDP.
The lowest share of public debt in GDP of 28.3 percent was recorded in 2008, and the highest in 2000, when it amounted to as much as 201 percent of GDP.
Serbia’s public debt grew from 2008 to 2015, after which it began to fall, Blic reports.
