Fiscal Council: Serbia Owes Emirates Two Billion
The Fiscal Council warns Serbia owes about two billion dollars to the Abu Dhabi Fund for Development in the second half of 2026, with the interest rate up to 4 percent and capital project costs overrunning.
- The Fiscal Council warns that in the second half of 2026 Serbia owes about two billion dollars to the Abu Dhabi Fund for Development.
- Two loans fall due four months apart, the first in August and the second at the end of the year, with the interest rate raised to 4 percent.
- Financing needs rise by roughly 30 percent against the previous year because of this debt alone.
- The national stadium grew more expensive by 7.5 billion dinars and road corridors by up to 90 percent, with no explanation in the budget documents.
In its latest analysis the Fiscal Council states that Serbia must repay around two billion dollars to the Abu Dhabi Fund for Development in the second half of 2026, an obligation concentrated within a few months that, in the body’s assessment, will weigh heavily on the budget. The figure covers two loans taken from the Emirati fund: the first was rescheduled in 2021 and matures in August 2026, while the second, from 2022, comes due at the end of the year. The two maturities are only four months apart.
The terms on which the debt is repaid have meanwhile worsened. The interest rate on the rescheduled loans has risen to 4 percent, which the Fiscal Council attributes to poorer conditions on international financial markets at the time of the rescheduling. As a result, financing needs this year rise by about 30 percent against the previous year, almost entirely because of these two instalments. In other words, a substantial share of the state’s borrowing this year does not fund new projects but closes out old obligations to Abu Dhabi.
“Because of this, Serbia will face heavy pressure on the budget in the second half of 2026,” the Fiscal Council notes in its assessment. The pressure is not abstract: when two large foreign currency instalments fall within the same half year, the state must secure liquidity either from current revenue or through fresh borrowing, usually at whatever price the market sets at that moment.
Why are project costs rising without explanation?
The second part of the warning concerns capital projects financed in part from Emirati and other sources. The national stadium has grown more expensive by 7.5 billion dinars, from an initial 67.5 to 75 billion, with additional supporting infrastructure costs kept on a separate line. Road corridors, according to the Fiscal Council’s findings, have overrun their contracted prices by up to 90 percent.
What the body singles out is the absence of any justification. “The budget documents lack explanations for cost overruns of this size,” the analysis states. For projects of this magnitude, where the difference is measured in billions of dinars, the lack of a written record of why prices rose makes any later audit of spending harder. Without that data, neither the National Assembly nor the public can determine whether the cause is a change in the scope of works, exchange rate differences, or something else.
What does this mean for the budget by year end?
The combination of two factors, a large foreign currency maturity toward Abu Dhabi and capital projects whose costs are rising faster than planned, means the budget’s room for manoeuvre in the second half is narrower than declared at the start of the year. If the instalments are refinanced through new borrowing, interest costs rise; if they are paid from current revenue, less remains for everything else.
The Fiscal Council does not claim insolvency, but rather a concentrated pressure that could have been spread more evenly and presented more transparently. The next test will be the budget revision and execution in the final quarter, when it will become clear exactly where the financing for the Emirati instalments came from.
Should the state publish the detailed breakdown of the stadium and corridor cost increases before it seeks any new borrowing?
