"General government debt 72.2 pct of GDP"

"General government debt 72.2 pct of GDP"

BELGRADE -- The Fiscal Council said in the December 2014 report that last year, the general government debt went up EUR 2.5 billion to EUR 23.2 billion (72.2pct of GDP).

The Fiscal Council - an independent state organ that reports to parliament - stated that changes in foreign exchange rates had contributed to such an increase in debt.

The increase in public debt to GDP was record high (11.1 percentage points), mostly owing to a strong growth of the U.S. dollar against the euro and the Serbian dinar.

According to the Fiscal Council, the changes in the exchange rates alone accounted for an increase in the public debt by almost five percentage points of GDP.

Since mid-2014, when the U.S. dollar started to grow, relevant government's liabilities increased by about EUR 1 billion, the Fiscal Council said.

The euro's drastic decline against the dollar continued in January 2015, by seven percent, which increased the public debt by EUR 1.5 billion to put it to EUR 23.7 billion, or more than 74 percent of GDP, and at the end of the month.

Dollar's growth made all loans denominated in that currency more expensive, said the Fiscal Council.

The budget expenditures to pay interest could, if the U.S. dollar remains at the level it was at the end of January, go up 10 percent against 2014, which would correspond to a pre-agreed interest rates' growth by one-fourth.

Last year, the general government debt increased by 2.5 billion, primarily due to a higher fiscal deficit, estimated at around EUR 2 billion, or 6.6 percent of GDP, the report said.

The Council stated that December's fiscal deficit was extremely high, RSD 44 billion, despite a seasonal...