At the start of 2020, Serbia's public debt was 24.3 billion Euro (some 53 percent of GDP), while the country's indebtedness currently exceeded 27 billion Euro, slightly above 58 percent of the GDP, Slobodan Minic, a Special Advisor to Serbia's Fiscal Council, has said on Friday.

He added it was expected the country’s public debt would near 60 percent of GDP by the end of the year. Minic said it remained to be seen whether the Government would come up with some new measures whose implementation would require additional government borrowing.

The Maastricht agreement for the European Union member states foresees the level of public debt should not exceed 60 percent of the GDP, and Minic says that level is often used as an indicator of long-term fiscal sustainability.

He told biznis.rs website that the general worsening of economic trends also contributed to the increase in public debt in 2020. However, he added, it happened primarily due to the Government’s measures to mitigate the negative consequences of the new crisis.

„The logic is simple: if a country has public debt significantly below that level, it can usually borrow heavily in an emergency with a limited risk of falling into a public finance crisis,“ Minic said.

He added the international experience indicated that for a country like Serbia, the appropriate highest level of public debt is around 50 percent of the GDP.

Minic said that keeping it below 60 percent in 2020 was crucial if Serbia wanted to reduce the public debt below 50 percent of the GDP in the medium term.

„It is even more important that the Government envisages a sufficiently small fiscal deficit in the budget for next year (of about two percent of the GDP), which would ensure that Serbia’s public debt is firmly on a declining path again,“ he added.