Serbia’s public debt reached €41.93 billion by the end of August as the government continued financing a major investment programme, while budget performance remained significantly better than planned. Debt stood at 43.3% of GDP, compared with approximately €39.34 billion at the end of 2025, according to Finance Ministry data. The stock of public debt therefore increased by roughly €2.6 billion during the first eight months.
At the same time, the republican budget deficit amounted to just RSD 98.4 billion (€840 million) from January through August, compared with a planned deficit of RSD 176.4 billion for the period. The result was approximately RSD 78 billion, or around €665 million, better than the budget plan.
Budget balance remains ahead of target
The August republican budget recorded a deficit of only RSD 0.6 billion, while the wider general-government sector posted a RSD 6 billion primary surplus during the first eight months. The stronger fiscal result means current government revenues remained sufficient to cover most expenditure before interest payments and major investment requirements.
The divergence between the rising nominal debt stock and the stronger budget performance is increasingly relevant to Serbia’s fiscal position. Public debt has moved closer to €42 billion, increasing refinancing and interest-rate exposure, while the debt-to-GDP ratio remains at 43.3%. That ratio is below the 60% Maastricht reference level used by the European Union and below the debt ratios of many European economies.
Infrastructure investment increases financing needs
Serbia’s higher borrowing requirements are linked to an extensive public investment cycle covering railways, motorways, Belgrade infrastructure, energy projects and Expo 2027-related investments.
The government is financing these projects while maintaining a budget deficit below the level originally planned for the first eight months. The scale of simultaneous construction programmes is increasing overall financing requirements, while the efficiency of capital deployment remains relevant to the fiscal impact of the investment cycle.
Debt trajectory depends on growth and borrowing
The better-than-planned January-August deficit provides the government with additional fiscal room for capital expenditure later in the year without automatically exceeding the annual fiscal target. Serbia’s future debt trajectory will depend increasingly on the relationship between nominal GDP growth and new borrowing. As economic output expands, the government can increase the absolute amount of debt while maintaining a relatively stable debt-to-GDP ratio. A slower growth rate combined with continued elevated infrastructure spending would make that relationship less favourable. The August fiscal data therefore show a rise in Serbia’s absolute public debt alongside a budget deficit that remains substantially below the amount planned for the period.
