Public debt growth "not alarming for now"

The increase of public debt-to-GDP ratio to EUR 14.75bn in September, i.e. 44.4 percent, "is not alarming for now", said the president of the Fiscal Council.

Izvor: RTS

Thursday, 20.10.2011.

14:56

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The increase of public debt-to-GDP ratio to EUR 14.75bn in September, i.e. 44.4 percent, "is not alarming for now", said the president of the Fiscal Council. However, it could be if the budget deficit is not reduced in 2012, Pavle Petrovic evaluated. Public debt growth "not alarming for now" Petrovic told state broadcaster RTS late on Wednesday that the increase in public debt by around EUR 1 billion was expected "due to the country's indebtedness which stemmed from the selling of Eurobonds worth one billion euros billion and additional loans on the domestic financial market." "What is important is that the new loans have not been spent on consumption, but will be used as deposits for covering the budget deficit and discharging obligation by mid 2012" Petrovic, who is also the professor at the Belgrade Faculty of Economy, explained. He said that the 2012 public debt ratio will be calculated according to GDP, which is expected to be up by at least two percent compared to this year. The public debt will not be reduced if the 2012 budget does not imply decrease of deficit to 3.9 percent of GDP, Petrovic noted. He recalled the country's obligation in terms of the agreement with the IMF to reduce the budget deficit in 2012, given its widening from 4.1 to 4.5 percent of GDP in 2011. Highest safe public debt-to-GDP ratio in Serbia amounts to 45 percent.

Public debt growth "not alarming for now"

Petrović told state broadcaster RTS late on Wednesday that the increase in public debt by around EUR 1 billion was expected "due to the country's indebtedness which stemmed from the selling of Eurobonds worth one billion euros billion and additional loans on the domestic financial market."

"What is important is that the new loans have not been spent on consumption, but will be used as deposits for covering the budget deficit and discharging obligation by mid 2012" Petrović, who is also the professor at the Belgrade Faculty of Economy, explained.

He said that the 2012 public debt ratio will be calculated according to GDP, which is expected to be up by at least two percent compared to this year.

The public debt will not be reduced if the 2012 budget does not imply decrease of deficit to 3.9 percent of GDP, Petrović noted.

He recalled the country's obligation in terms of the agreement with the IMF to reduce the budget deficit in 2012, given its widening from 4.1 to 4.5 percent of GDP in 2011.

Highest safe public debt-to-GDP ratio in Serbia amounts to 45 percent.

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