Serbia’s public debt up 0.4% m/m and 21% y/y to EUR 19.1bn at end-August 2013.

By bne IntelliNews September 17, 2013

Serbia’s public debt rose 0.4% m/m to EUR 19.1bn at end-August or 58.3% of the forecast GDP, data from the finance ministry showed. In annual terms, the public debt climbed 20.8% y/y, lifted by Serbia’s three Eurobond issues since end-September 2012, worth a combined USD 3.3bn. The bulk of the public debt is in foreign currency, out of which 48.3% is in EUR and 26.5% in USD. Another 18.7% of the debt is denominated in local dinar currency, the country’s debt administration said.

End-August public debt, excluding state guarantees, rose 7.9% ytd to EUR 16.3bn (85% share of total debt). The state guarantees climbed 11.0% ytd to EUR 2.9bn.

The country's public debt increased significantly to 59% of GDP at end-2012 from 29% of GDP at end-2008, well exceeding the legal limit of 45% of GDP.

Serbia’s public indebtedness will likely continue increasing as the country seeks to finance its rising budget gap. The latter is projected to reach 5.3% of GDP in 2013, according to the revised budget law, up from initially planned 3.6% of GDP. Serbia is preparing a new Eurobond issue worth USD 1bn, local media reported earlier. Furthermore, the country is considering borrowing another USD 2bn-3bn from the United Arab Emirates in order to repay some of its debts and raise money for investments, deputy PM Aleksandar Vucic said last week.

According to the independent fiscal council, the end-2013 public debt will reach EUR 21bn or 65% of GDP. The council also warned that local dinar currency weakening since end-May could result in an increase of the public debt-to-GDP ratio, as over 70% of Serbia public debt is EUR and USD denominated.

Serbia's public debt, EUR mn Dec'10 Dec'11 Dec'12 Aug'13
Public debt excluding guarantees 10,444.5 12,674.7 15,070.7 16,264.0
-- Internal debt 4,571.8 5,118.4 6,452.6 6,536.0
-- External debt 5,872.7 7,238.6 8,618.1 9,728.0
Public debt including state guarantees 1,712.5 2,109.6 2,600.4 2,885.6
-- Internal debt 340.0 535.8 722.6 834.2
-- External debt 1,372.5 1,573.8 1,877.8 2,051.4
Total public debt 12,157.0 14,784.3 17,671.1 19,149.6
Public dept/GDP, % 44.5 48.2 59.3 58.3
Source: MinFin      

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