The global economic crisis was rolling through the world, but Serbia, at least in terms of debt, was still standing solidly. In fact, Serbia had one of the best outcomes in the first quarter of the 21st century in 2008. Comparing public debt and its share in GDP from 2000 to the present, the figures were in favor of the second term of Prime Minister Vojislav Koštunica. In 2008, Serbia’s public finances were still holding up well, at least regarding public debt. However, the deficit indicated where things were heading. From 180% to 88% of GDP.
The government of Zoran Đinđić was formed in January 2001. By the end of 2000, Serbia’s debt stood at 14.1 billion euros, which was significantly higher than the GDP at the time, almost 180% of it. However, during the same year, public debt was significantly reduced. By the end of 2001, Serbia’s debt was 13.4 billion euros, or 88.1% of GDP.
Zoran Živković became Prime Minister in 2003, and Serbia’s debt was reduced to 11 billion euros, about half of the GDP. By the end of his term, the debt had dropped to 9.7 billion euros, or 48.7% of GDP.
Koštunica’s first government continued to reduce debt, from 9.7 billion euros to 8.9 billion euros by the end of 2007, or 26.8% of GDP. However, the financial crisis was beginning to pick up steam in the second term, and Serbia had yet to recognize it. At the end of Koštunica’s second term, debt was the lowest it had been – 8.78 billion euros, or a quarter of GDP. This was also the year Serbia sold a majority stake in the state-owned company, Naftna Industrija Srbije (NIS), to Russian Gazprom Neft for 400 million euros, with the agreement to invest around 550 million euros into the modernization of the Pančevo refinery.
Mirko Cvetković’s government, which took office in 2008, faced an increasingly complicated financial position. By 2009, Serbia’s debt had grown, with experts and media warning that the planned budget was unrealistic and signaling the need for a budget rebalance and new borrowing. In 2008, Serbia finished with a budget deficit 8.9 billion dinars higher than planned, and revenues continued to decline in the following months, while loans and debt rose. By the time the Cvetković government left office in July 2012, debt had risen to nearly 15.4 billion euros, or about 44% of GDP.
The first government of Ivica Dačić, from July 2012 to April 2014, saw debt rise to 20.6 billion euros, or 62.7% of GDP. According to the Fiscal Council, by 2012, it had become clear that Serbia’s public finances were unsustainable without a major shift in fiscal policy. In response to a budget deficit of 6.8% of GDP and growing public debt, a three-year fiscal consolidation program was implemented, which aimed to reduce the deficit through measures such as limiting wage and pension increases, raising several tax rates, and reforming public enterprises.
Under Dačić’s government, Serbia moved from being a moderately indebted country to one of the most indebted in the region. By 2015, Serbia was spending more on interest payments on public debt than on public investment, education, and science combined. By the time of the fiscal consolidation under Prime Minister Aleksandar Vučić in 2016, debt had grown to 24.3 billion euros or 72.1% of GDP.
During Vučić’s second term as Prime Minister, public debt slightly decreased, standing just under 24 billion euros by the end of 2018. The debt-to-GDP ratio fell to 65.7% due to another fiscal consolidation program, with results showing a significant reduction in the budget deficit.
Over the next three terms of Ana Brnabić’s government, the amount of debt continued to grow, but its share in GDP kept falling. By 2020, the debt reached 26.7 billion euros or 56.9% of GDP. By the end of her second term, the debt had risen to 32.4 billion euros, but the debt-to-GDP ratio was down to 53.7%.
As of the government of Miloš Vučević at the end of 2024, public debt stood at 38.9 billion dinars, or 47.4% of GDP, which was lower than in previous years but still a significant amount.
