Serbia budget deficit sparks debate over fiscal sustainability

Debate has emerged regarding Serbia's budget deficit and long-term fiscal sustainability. Slobodan Cvejić, Vice President of the Serbia Center and a Member of Parliament, warned that the increasing budget deficit is becoming unsustainable. He noted that while revenues are growing at 4.7%, expenditures are rising faster at 6.2%, which he characterized as a path toward state bankruptcy. Cvejić also raised concerns regarding the timing of planned expenditures, suggesting that a significant portion of the deficit is planned for the second half of the year as a form of pre-election fiscal stimulus.

In response, Finance Minister Siniša Mali dismissed claims of a record deficit as a statistical misunderstanding. Mali argued that the deficit, which stands at 3.5% of GDP, is a direct result of record capital investments totaling 780 billion dinars, or approximately 7% of GDP. He emphasized that these funds are being directed toward infrastructure, hospitals, and schools to increase the country's productive potential. Mali further stated that Serbia's public debt remains at a historically low level, below 45% of GDP, which is significantly lower than the European Union average.