Key facts
- Serbia's central government budget posted a deficit of RSD 1.7bn in April.
- The budget gap for January-April widened by 27.8% year-on-year to RSD 99.6bn.
- Budget revenues increased by 10.3% year-on-year to RSD 753.9bn in January-April.
- Budget expenditures rose by 12.1% year-on-year to RSD 853.5bn in the first four months.
- The general government budget deficit was RSD 106.2bn in January-April.
Serbia's central government budget reported a deficit of RSD 1.7bn in April, a significant improvement from the RSD 50.2bn deficit recorded in the same month last year. However, for the first four months of the year (January-April), the budget gap widened by 27.8% year-on-year to RSD 99.6bn. This figure, while representing an increase, was still better than the planned deficit of RSD 186.2bn for the period. The deficit for January-April represented 0.9% of Serbia's GDP, well below the full-year target of 3.0% of GDP.
Budget revenues saw a 10.3% year-on-year increase, reaching RSD 753.9bn in January-April. This growth was driven by higher VAT and corporate income tax revenues, although excise tax revenues decreased by 3.5% due to government measures to mitigate high fuel prices. Non-tax revenues also contributed positively with a 24.6% rise. Expenditures increased by 12.1% year-on-year to RSD 853.5bn, primarily due to higher spending on employees, increased transfers to social security funds following wage and pension hikes, subsidies, procurement, and capital investments for Expo 2027 infrastructure.
The broader general government budget posted a deficit of RSD 106.2bn in January-April, compared to RSD 62.0bn in the prior year. Risks to fiscal stability include potential energy shocks from the ongoing conflict in Iran and uncertainties surrounding the oil company NIS. Early parliamentary elections, expected by year-end, could also lead to increased social spending. The government has already expanded subsidised housing loans and plans further measures to reduce medicine costs and improve living standards, with potential pension and wage hikes anticipated as elections approach.