Serbia’s reported budget deficit widened sharply in September, reaching RSD 106.2 billion (€903 million) as public expenditure increased substantially faster than government revenue. The figures, reported by Serbian weekly Radar but not yet confirmed by the Finance Ministry, indicate that the monthly shortfall exceeded the combined deficit recorded during the first eight months of 2026.
The cumulative budget deficit for January–September rose to RSD 204.6 billion (€1.74 billion), approximately 2.7 times the €645 million recorded over the same period in 2025. The Finance Ministry is expected to release official September budget-execution figures. The reported deterioration contrasts with the government’s October 5 announcement that the deficit for January–August stood at RSD 98.4 billion (€838 million), approximately RSD 78 billion below the amount planned in the budget.
Expenditure Growth Outpaces Revenue
Serbia’s September expenditure reportedly reached RSD 296.6 billion (€2.52 billion), representing a 65.6% year-on-year increase. Revenue grew by a considerably slower 12.8%, reaching approximately €1.62 billion. The widening gap between spending and receipts has brought expenditure management into sharper focus as a central fiscal challenge.
Transfers to compulsory social-insurance organisations accounted for a significant portion of September outlays, amounting to RSD 81.1 billion (€690 million). These payments included funding associated with one-off financial assistance programmes introduced through the government’s August budget revision. The revised budget raised planned expenditure to RSD 2.92 trillion (€24.9 billion), while projected revenue was set at RSD 2.53 trillion (€21.5 billion). The revised plan established an annual deficit target of approximately €3.37 billion, equivalent to 3.5% of GDP, compared with the original target of 3%.
Fiscal Council Questions Budget Expansion
Serbia’s Fiscal Council had previously challenged the scale of the budget expansion, estimating that the deficit could otherwise have remained within a range of 2% to 2.5% of GDP. The government defended the revision on the grounds that additional spending would support household purchasing power, economic growth and public investment.
The reported September figures have implications for the financing of Serbia’s infrastructure programme, which includes Expo 2027, the National Stadium, major motorway corridors, railway upgrades and urban transport projects. Under the revised budget, general-government capital investment is projected to reach RSD 779.9 billion (€6.64 billion) in 2026, equivalent to approximately 7% of GDP.
Infrastructure Commitments and Borrowing Requirements
Maintaining planned capital investment alongside higher social expenditure could increase the importance of domestic government bond issuance, international borrowing and financing from development institutions.
For commercial banks and institutional investors, relevant indicators include the government’s financing requirements, yields on sovereign securities and the extent to which public-sector borrowing competes with private investment for available capital. The reported September deficit does not, on its own, establish that borrowing costs have increased.
Exceptional Receipts Support the Budget Balance
Government finances also received substantial one-off inflows during 2026, including a dividend payment from Serbia Zijin Copper, the copper producer majority-owned by China’s Zijin. According to Radar, the company transferred RSD 10.26 billion (€87 million) to the state budget on September 24 in connection with the government’s 37% shareholding.
In August, the National Bank of Serbia had transferred RSD 33.7 billion (€287 million) from its financial surplus for 2025. Together, the two payments generated approximately €374 million in revenue, helping to reduce the reported cumulative deficit. The scale and timing of these receipts may not be repeated in subsequent budget periods. Their contribution therefore remains distinct from recurring government revenue when assessing the underlying fiscal position.
Fiscal Flexibility in the Final Quarter
Serbia entered 2026 with comparatively moderate public debt and continued access to domestic and international financing markets. The reported deterioration consequently raises questions about the scope for maintaining existing spending commitments without increasing future financing requirements. With the final quarter traditionally involving substantial budget expenditure, the government faces the task of balancing household support and infrastructure investment against its revised fiscal target.
The forthcoming official September budget-execution data will provide a further assessment of the fiscal position as the government seeks to meet its spending obligations while managing its reliance on recurring revenue, exceptional dividend payments, central bank transfers and additional borrowing.
