How indebted is Serbia?

While the government claims that the state is not too far in debt, some experts are warning that Serbia has reached the level of a seriously indebted country. During last year and the first two months of 2010, Serbia’s foreign debt was increased by five percent. How indebted is Serbia? The last credit Serbia took out was from Russia, worth EUR 200mn, for covering budget expenses. The Bor mining company is expected to take a loan out from a Canadian bank, and the state will be giving guarantees for paying back this loan. “I personally believe that Serbia has room for more debt until the level of the debt reaches 40 percent in relation to the gross domestic product. It is now at 32 percent,” Economy Minister Mladjan Dinkic said. Even though Dinkic says that the government is being very thrifty, some economists believe otherwise, adding that a country is severely in debt if the debt is 2.2 times greater than the total export of products and services. Last year, the debt was 2.75 times great than exports. The average interest for credit taken out last year was 2.16 percent, and the average period for paying the loans back is 18 years. In this year, Serbia will have to pay back EUR 496mn based only on state credit taken out. Official of the Academy of Economic Studies Mladjan Kovacevic said that Serbia is certainly in the ranks of countries with high levels of indebtedness. Economic analysts believe that Serbia’s capabilities for returning the money depend most on the strength of the industry and the ability of Serbian companies to export goods and secure foreign currency in that way.

How indebted is Serbia?

The last credit Serbia took out was from Russia, worth EUR 200mn, for covering budget expenses.

The Bor mining company is expected to take a loan out from a Canadian bank, and the state will be giving guarantees for paying back this loan.

“I personally believe that Serbia has room for more debt until the level of the debt reaches 40 percent in relation to the gross domestic product. It is now at 32 percent,” Economy Minister Mlađan Dinkić said.

Even though Dinkić says that the government is being very thrifty, some economists believe otherwise, adding that a country is severely in debt if the debt is 2.2 times greater than the total export of products and services.

Last year, the debt was 2.75 times great than exports.

The average interest for credit taken out last year was 2.16 percent, and the average period for paying the loans back is 18 years. In this year, Serbia will have to pay back EUR 496mn based only on state credit taken out.

Official of the Academy of Economic Studies Mlađan Kovačević said that Serbia is certainly in the ranks of countries with high levels of indebtedness.

Economic analysts believe that Serbia’s capabilities for returning the money depend most on the strength of the industry and the ability of Serbian companies to export goods and secure foreign currency in that way.