Bloomberg News

Serbian First-Quarter Budget Deficit Double IMF Loan Target

May 15, 2012

Serbia’s first-quarter budget deficit was double the target agreed upon in a loan program with the International Monetary Fund while the government also breached a self-imposed public-debt limit.

The shortfall totaled 52.7 billion dinars ($601.4 million) compared with the IMF target of 26 billion dinars. Public debt increased to 46.8 percent of economic output from 44.5 percent at the end of February, the Belgrade-based Finance Ministry said on its website today. The gap in March was 11.1 billion dinars according to IMF methodology, it said.

March drew in “significantly higher revenue” than February, when three weeks of freezing temperatures and heavy snowfall resulted in reduced power supplies to some industries, the ministry said. Budget revenue in March rose on corporate income-tax payments and a 3 billion-dinar dividend paid to the state by government-held Telekom Srbija AD.

Spending in March rose to 79.4 billion dinars from 74.7 billion in February as the government paid subsidies to farmers and to state-owned the road operator, while it continued to finance the pay-as-you-go pension fund and repaid debt to foreign creditors.

The Washington-based lender agreed with the government to freeze a $1.3 billion loan program after it became clear Serbia would slip on agreed targets, exceeding the budget-deficit limit of 4.25 percent of gross domestic product by at least one percentage point. The first-quarter budget gap totaled 6 percent of GDP. Serbian fiscal rules set a limit of 45 percent of GDP for public debt.

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

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

Steve Ballmer, Power Forward
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