Economist calls Vučić's new measures 'pre-election spending' that will raise public debt

Professor Milojko Arsić of the Faculty of Economics has criticized Serbian President Aleksandar Vučić's newly announced economic measures, labeling them as "pre-election spending." Arsić argues that while these measures will temporarily stimulate economic activity ahead of elections, they will lead to a permanent increase in public debt. He believes the timing clearly indicates a political motive to secure the support of lower-income voters, who predominantly vote for the ruling party. "This spending will slightly boost economic activity before the elections, but it will simultaneously result in a permanent increase in state debt," Arsić told FoNet. He estimates the total planned expenditures at around 600 million euros, representing just over 0.6% of the GDP. Arsić noted that these measures pose no risk to fiscal sustainability, although they will widen the budget deficit. He suggested the actual deficit increase might be lower than projected, as some costs could be deferred or offset by savings elsewhere. Funding for these measures will come entirely from borrowing, as the state operates with a deficit. Arsić pointed out that Serbia recently borrowed 3 billion euros, using about 900 million to repay existing debt and retaining approximately 2.1 billion euros. He also commented on the social aspect, stating the current measures are better designed and more precisely targeted than previous programs. Unlike earlier initiatives focused mainly on pensioners, the new measures aim to include more vulnerable groups, such as the elderly and social welfare recipients.

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This spending will slightly boost economic activity before the elections, but it will simultaneously result in a permanent increase in state debt.