Soskic: I Don’t Think Serbia’s Public Debt Gives No Reason for Concern

Dejan Soskic (BETAPHOTO/MILAN OBRADOVIC)

A former governor of the National Bank of Serbia, economy professor Dejan Soskic, said on Jan. 9 that he couldn’t agree with the authorities that “Serbia’s public debt is not alarmingly high,” as interest rates continued to grow, along with the cost of borrowing in the international market.

“For a state yet to finish the reform process, which also has a public sector riddled with hidden potential losses that it would eventually have to pay, and an economy that is not competitive enough, the public debt is already very high,” Soskic said in an interview with the portal Nezavisnost.org.

The professor explained that the public debt went up from EUR22.5 billion in 2019 to EUR30.8 billion in the third quarter of 2022, and the government brag that the state supported businesses and citizens with nearly nine billion euros over the past three years, could only mean that foreign loans had made it possible, which Serbs would have to pay back.

Soskic underlined that Serbia was joining a category of “vulnerable developing states,” to which the International Monetary Fund would offer programmes of support in reaction to the growing cost of borrowing internationally.

The former central bank governor also cautioned that on the world’s corruption perception list Serbia was 96th, way behind Croatia, Montenegro and North Macedonia, adding that Serbia was the only European state on the black list of the Financial Action Task Force (FATF), combating money laundering and terrorist financing.