State facing substantial borrowing next year – Around EUR 8.3 billion to repay budget deficit and old debts

The Government of Serbia plans to borrow around 970 billion dinars (approximately EUR 8.3 billion) in 2026 to cover the budget deficit and repay old debts, the Nedeljnik.rs portal reports today.

According to the budget proposal for next year, state treasury expenditures will amount to 2,751.7 billion dinars (EUR 23.5 billion), while income is expected to be 2,414.7 billion dinars (EUR 20.6 billion), which creates a deficit of 337 billion dinars (EUR 2.88 billion).

Repayment of old loans

A significant part of the new borrowing will not be directed to new projects, but to repay previously taken loans and bonds.

In 2026, as much as 793 billion dinars (around EUR 6.77 billion) of the principal of old debts will be due for collection.

What stands out among the largest liabilities are two large budget support loans from the Government and the Abu Dhabi Fund for Development (United Arab Emirates), which are fully due in August and December 2026.

The total principal amount that must be repaid under these two loans is two billion dollars, or almost EUR 1.9 billion.

In addition, a large part of the money will also be used to repay matured government bonds sold on the domestic market, as well as to fulfill obligations to the International Monetary Fund.

Loans from foreign governments and funds

To secure the necessary funds, the state plans to borrow from three main sources.

The plan is to borrow up to 380 billion dinars (about EUR 3.24 billion) from loans from domestic and international financial institutions, then up to 320 billion dinars (about EUR 2.73 billion) through the issuance of government bonds on the domestic market and up to 260 billion dinars (about EUR 2.22 billion) through the issuance of Eurobonds on the international market.

A significant part of the borrowing, as much as 234.4 billion dinars (EUR 2 billion), is planned as general support to the budget through loans from foreign governments and funds.

These funds, as explained, are intended for “financing support to the budget of the Republic of Serbia (including, but not limited to, providing funds for financing the needs of the Republic of Serbia of national importance),” which means that they are not tied to specific projects, but serve to maintain liquidity and cover general state expenses.

In addition to general borrowing, the Government also plans to take out a large number of earmarked loans to finance capital projects.

Most of the money from such borrowings is intended for transport and energy infrastructure.

Key projects that will be financed from the new loans are the construction of the Pozega - Boljare highway, the reversible hydroelectric power plants “Bistrica” and “Djerdap 3,” the continuation of the construction of the Belgrade subway, as well as the modernization and reconstruction of key rail routes across the country.

Vlada Republike Srbije

Međunarodni monetarni fond-MMF Beograd

Government of Serbia

International Monetary Fund

IMF

debt

borrowing

loans