Fiscal Council chief says Serbia not prepared for new crisis

Pavle Petrović
N1

Fiscal Council Chairman Pavle Petrovic warned on Monday that Serbia is not prepared for the looming crisis, adding that the public debt is higher than what the authorities are claiming.

“Serbia is not as prepared for the new crisis as it was for the economic crisis caused by the COVID pandemic,” Petrovic told N1 at the Kopaonik Business Forum. He said that the public debt stands at 57 percent of the GDP.

“That is the real figure. I don’t know why the Finance Minister would say that the public debt is at 51 percent of the GDP. The real public debt stands at 57 percent of the GDP and could rise along with the crisis which could be dangerous. The partly good news is that the deficit could be kep under control at a relatively low level if we exclude the crisis,” Petrovic said.

According to Petrovic, an energy crisis is coming and will affect the state-owned Srbijagas and EPS power company which, he said, remain unreformed. He said that Srbijagas has already taken 400-500 million Euro from the budget to import gas even though it has a low price agreed with the Russians and added that EPS has imported electricity worth 500 million Euro partly paid for with a 300 million Euro loan which will probably be repaid from the budget.

He said that spending should be directed solely at meeting energy needs and public investments and added that the second payment of the 100 + 100 Euro for young people should not be paid because the money will have to be borrowed instead of being used to deal with the looming crisis

Petrovic said that the budget was relatively balanced when the pandemic broke out with no deficit and public debt at the relatively low level of 52 percent of the GDP. He said that five billion Euro were spent to deal with the pandemic, adding that half that would have been enough.