The Serbian Fiscal Council said on Friday that the cost of the measures announced by President Aleksandar Vucic will cost about 550 million Euro and warned that the expense would be covered by loans under bad conditions.

Vucic told a media conference earlier this week that pensions and some public sector salaries would be raised towards the end of the year.

The Fiscal Council said that the 5.5 percent raise in pensions means an added expense of 350 million Euro a year for the budget. The once-off payment of 10,000 Dinars to each child to the age of 16 will cost another 100 million Euro, the raise in public sector salaries will cost some 80 million Euro and other fiscal policy measures will cost 20 million Euro, it added.

Finance Minister Sinisa Mali told the state TV (RTS) that there is enough money in the budget to cover the pension and salary raises.

The Fiscal Council said that most of those expenses will be visible in the 2024 budget.

“Since the Serbian budget has been in deficit for a while with no extra funds, the measures will be financed with foreign debts… The state is now incurring debts on the international market at an interest rate of 6.5 percent with interest on some loans reaching up to 8 percent,” it warned.