Bloomberg News

Serbia’s 11-Month Budget Gap in Line as November Brings Revenue

December 15, 2011

Dec. 15 (Bloomberg) -- The Serbian budget deficit narrowed in November after state-owned companies paid profits to the budget and citizens paid tax on interest they received on their savings deposits, the Finance Ministry said.

The 11-month report was published before the government is due to unveil the draft 2012 budget, which parliament needs to adopt by the end of December.

The monthly shortfall in November of 11.3 billion dinars ($145.09 million), calculated under International Monetary Fund methodology, brought the total January-November gap to 119.97 billion dinars, compared with a 142.7 billion-dinar cap set in a revised 2011 budget.

If the government was to meet its full-year target for the fiscal gap, the remaining 22.7 billion dinars would be the highest monthly shortfall this year.

The fiscal deficit of 142.7 billion dinars will represent 4.5 percent of Serbia’s gross domestic product, as agreed with the IMF under its $1.3 billion precautionary loan deal, under which Serbia has committed to cut the 2012 budget gap to 4.25 percent of GDP in order to keep its public debt under control.

The Balkan nation’s total public debt, comprising the government’s liabilities to creditors at home and abroad, moved up to 44.8 percent of GDP from 44.3 percent of GDP in the previous month, calculated by local methodology, the ministry said on its website.

Serbia needs to observe its self-imposed fiscal rule that limits public debt at 45 percent of GDP to ensure macroeconomic stability. The Finance Ministry’s report today showed the public debt-to-GDP ratio at 42.2 percent of GDP if the European Union’s Maastricht criteria were used for calculations, up from 41.6 percent in October.

Earlier this month, the government decided to halt further market borrowing through the end of 2011 to make sure the 45 percent rule is not breached.

--Editors: Douglas Lytle, James M. Gomez

To contact the reporter on this story: Gordana Filipovic in Belgrade at

To contact the editor responsible for this story: James M. Gomez at

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