Serbia has, step by step, come to bankruptcy again. Debts increased so much in 2013, that only interest will cost us 2 million Euros daily.
The fact that we can build a hospital with one day interest financing money and with two days money build a school, shows how big is the cost.
Question is how much space Serbia will have for that kind of investments, because only interests worth 750 million Euros, while we should think on paying back of 4, 5 billion worth capital.
“Bankruptcy will come soon, but we don’t know exactly when. Stagnant production increase which lasts for years and rapid borrowing indicate that”, believes economist Miroslav Prokopljevic.
He adds that we got into debt for interest over 5% last time. Countries in big financial problems such as Spain and Italy usually get into debt at that amount.
Vladimir Gorogov, Assistant of the Vienna Institute for International Economic Studies, says that we are just few steps away from “the Greek scenario”. We will move in that direction if state doesn’t manage to keep course and inflation in planned limits.
“Crucial question for 2013 is whether public debt will continue to grow. Government isn’t planning that, but everyone else expects. If that happens, additional public spending decrease and tax increase will be required, and both are possible. If that prolongs recession, public financing sustainability will come to question”, claims Gligorov.
Source Serbia Energy Magazine
