Mali to Culibrk: Deficit Is 3.5%, Not a Record High

Why the Deficit Interpretation Differs

The core of the dispute is what the deficit actually covers. Mali says the state is now investing around 780 billion dinars, or 7% of GDP, twice the size of the deficit itself. In his Facebook post he wrote:

“Today the state is investing around 780 billion dinars, or 7% of GDP, twice as much as the deficit.”

Average capital investment over the past decade, according to the figures he cited, stands at 5.5% of GDP. Mali argues that without capital spending the budget would be running a strong surplus, that wages, pensions and all regular obligations are paid out of current revenue, and that the shortfall appears because railways, highways, power facilities, hospitals and schools are being built at the same time.

The basic yardstick, the minister says, is the ratio to GDP, not the absolute figure in dinars:

“The sustainability of public finances is not assessed by comparing dinar amounts from different years, but by the deficit relative to GDP.”

Public Debt Below Half the EU Average

One part of Mali’s response he singled out concerns public debt. According to him, Serbia’s debt remains under 45% of GDP, at 44.2% to be exact, and continues to fall. For comparison, he cited the European Union average of 82.9% of GDP and the eurozone average of 89.4%, against a Maastricht ceiling of 60%. By that measure, Serbia sits at roughly half the European average level of indebtedness, alongside capital investment of 7% of GDP, which he says is closer to the exception than the rule in Europe today.

Mali also leans on outside assessments to back his case. He noted that S&P rates Serbia investment grade at BBB minus with a stable outlook, while Fitch has affirmed a BB plus rating with a positive outlook. He also pointed out that the Fiscal Council holds the mandate to assess the sustainability of public finances, while the government sets economic priorities and answers for them to parliament and to citizens, and that cautious revenue planning at a time of global uncertainty, in line with messages from the International Monetary Fund, is a form of responsible management.