Serbia's external debt stock inched down 0.7% y/y to EUR 25.5bn at end-November 2013, marking an annual drop for a second straight month after contracting 0.1% y/y in October, central bank data showed on January 20. November’s decline continues to be underpinned by falling corporate and banking-sector indebtedness which offset rising public foreign liabilities.

According to IntelliNews calculations, the foreign debt equalled to 78% of the full-year GDP forecast, down from 86% a year ago. On a monthly basis, the external debt edged down 0.6% at end-November following a 0.7% m/m drop at end-October, due to lower foreign liabilities to the IMF, the EBRD and other creditors.

Long-term public-sector borrowing rose 3.2% y/y to EUR 12.6bn at end-November, cooling from a 8.7% y/y hike the month before. Long-term private external indebtedness continued retreating, shrinking 2.1% y/y to EUR 12.7bn at end-November albeit softening from a 8.7% annual decline at end-October.

The short-term external debt stock decreased 60.5% y/y to EUR 198.9mn at end-November following a 62.3% annual contraction the month before, as the banking sector debt plunged 64.3% y/y to EUR 155.8mn.

Serbia's external debt growth braked to 6.6% in 2012 from 21.8% in 2008, reflecting the corporate and banking sector deleveraging. On the other hand, the external liabilities of the public sector increased steadily over the period due to rising fiscal imbalances.

In 2014, the country plans to borrow EUR 5.6bn (up 1.8% y/y) to service its debt and finance a budget gap that is expected to reach 7.1% of economic output.