Serbia’s consolidated public finances posted a larger deficit during the first five months of 2026, as government expenditure increased more rapidly than revenue while public debt rose following the settlement of a multi-billion-euro international bond issue.
Fiscal data show continued investment in capital projects alongside stronger growth in current spending, with the government’s borrowing programme increasing the country’s debt stock while maintaining access to international capital markets.
Budget gap expands during first five months
The consolidated budget recorded a deficit of RSD 106.5 billion, equivalent to approximately €908 million, between January and May 2026, almost double the shortfall reported during the corresponding period a year earlier. In real terms, public revenues increased by 6.8%, while total expenditures rose by 9.3% over the same period. Current expenditure expanded by 9.8%, outpacing capital spending, which reached RSD 238 billion after recording 7.5% real growth.
International bond issue lifts public debt
At the end of May, Serbia’s public debt stood at €41.14 billion, representing 43.7% of projected GDP, compared with €39.21 billion, or 41.6% of GDP, at the end of April. The monthly increase was largely driven by settlement of the country’s approximately €3 billion international bond issuance completed on 28 April. The financing package comprised a €1 billion five-year bond carrying a 4.25% coupon, a €900 million 12-year green bond issued with a 4.875% coupon, and a $1.25 billion 10-year US dollar bond. The transaction demonstrated Serbia’s continued ability to access international debt markets while increasing the overall interest burden and reinforcing reliance on foreign investors and foreign-currency financing.
Debt ratio remains below many European peers
Despite the increase in borrowing, Serbia’s public debt ratio of 43.7% of GDP remains moderate relative to many European sovereign issuers. The composition of public expenditure remains an important consideration for investors. Borrowing directed toward transport, energy and export infrastructure has the potential to support future economic growth, while continued acceleration in current spending could weaken the fiscal position underpinning a potential future sovereign rating upgrade by Fitch Ratings. Under its programme with the International Monetary Fund (IMF), Serbia remains committed to maintaining the fiscal deficit within 3% of GDP during 2026 and 2027.
