Serbia’s central government recorded a budget deficit of approximately €832 million in the first seven months of 2026, after a sharp increase in investment payments in July reduced the fiscal cushion accumulated during the previous month, according to Ministry of Finance data.
Revenue reached approximately €12.39 billion in January–July, compared with expenditure of €13.22 billion. July alone produced a €394 million deficit, while the first six months had ended with a €438 million shortfall. All euro figures use the National Bank of Serbia’s official middle exchange rate of RSD 117.4948 per euro. The latest observations in the ministry workbook cover July and therefore do not describe the fiscal position at the end of September.
Investment spending rises sharply
Net investment in nonfinancial assets increased to approximately €772 million in July, from €347 million in June. July investment represented 33.7% of monthly expenditure, compared with 18.3% during the first half of the year. The July figure accounted for nearly 28% of the €2.77 billion recorded under the investment category during January–July.
The ministry data do not identify individual roads, railways, energy projects, contractors, procurement arrangements or payment milestones behind the investment spending. July revenue was approximately €1.90 billion, while expenditure excluding net investment in nonfinancial assets stood at about €1.52 billion. That left approximately €378 million before investment spending was included.
June surplus followed strong tax receipts
June recorded a €410 million surplus, with revenue of approximately €2.35 billion. Corporate income tax receipts reached about €637 million in June, compared with €242 million in July. June accounted for around 35% of the €1.82 billion collected from corporate income tax during the first seven months. For comparison, annual corporate income tax revenue was approximately €2.32 billion in both 2024 and 2025, increasing only 0.1% in dinar terms. Personal income tax revenue rose 9.5% in 2025, reaching approximately €1.19 billion.
Borrowing rebuilds cash reserves
Serbia recorded a calculated primary surplus of approximately €76 million in January–July, down from €313 million through June. July generated a primary deficit of around €237 million. Interest expenditure reached approximately €908 million, equivalent to 7.3% of total revenue.
Net incurrence of liabilities amounted to approximately €2.22 billion, well above the €832 million fiscal deficit. The government also recorded around €1.39 billion in net financial asset acquisition, including an increase of approximately €1.50 billion in currency and deposits. May was the main funding month, with net liabilities increasing by about €1.90 billion and currency and deposits rising by approximately €1.91 billion.
Securities account for most new borrowing
Net incurrence of debt securities reached approximately €2.21 billion during January–July. Gross bond issuance totalled about €4.63 billion, against approximately €2.43 billion in principal repayments. New loan disbursements amounted to around €1.09 billion, compared with €1.08 billion in loan repayments. Gross funding across bonds and loans therefore reached approximately €5.73 billion, while principal repayments totalled about €3.51 billion.
Taxes remain the main revenue source
Tax receipts reached approximately €11.03 billion, representing 89.1% of total revenue. VAT generated around €5.36 billion, while excise duties contributed €2.16 billion. Import VAT accounted for approximately €3.82 billion, or 71.3% of VAT receipts. Oil-related excises generated about €956 million, tobacco excises €878 million, and electricity excises €164 million. Non-tax revenue reached approximately €1.03 billion, including €53 million in dividends, while grants amounted to about €326 million.
Annual spending remains higher
In 2025, revenue increased 6.6% to €19.34 billion, while expenditure rose 8.5% to €21.65 billion. The deficit widened from approximately €1.80 billion in 2024 to €2.31 billion, an increase of 27.9%. Employee compensation increased 24.4% to €5.02 billion, accounting for roughly 58% of the total expenditure increase. Purchases of goods and services rose 16.4% to €1.63 billion, while social benefits increased 11.4% to €1.79 billion.
Net investment in nonfinancial assets grew 2.7% to €4.90 billion, while interest expenditure increased 0.6% to approximately €1.44 billion. The 2026 fiscal fields in the workbook are incomplete, so the data do not establish the full-year deficit or current September borrowing position. The figures cover central-government operations and should be distinguished from the consolidated general-government balance.
