Fiscal reaction to interest payments: The case of Serbia

Vladimir Andric, Milojko Arsic, Aleksandra Nojkovic
2016 Industrija  
We focus on the response of primary fiscal balance to interest payments and borrowing costs on Serbian public debt before, during and in the aftermath of the global financial crisis. Our analysis reveals: i) policy makers financed up to 50% of each percentage point increase in interest payments to GDP ratio with new public debt issuance; ii) the government has responded to rising interest payments and borrowing costs by reducing primary fiscal balance from the onset of the global financial
more » ... obal financial crisis; iii) the response of primary fiscal balance to interest payments mimics the response of primary fiscal balance to the costs of borrowing; iv) fiscal austerity measures adopted after the breach of fiscal rule for public debt have been insufficient to stabilize fiscal policy stance in Serbia. Fiskalna reakcija u odnosu na troškove kamata-slučaj Srbije Apstrakt: U ovom radu fokusiramo se na reakciju primarnog fiskalnog bilansa na troškove kamata i zaduživanja na srpski javni dug pre, tokom i nakon izbijanja globalne finansijske krize. Naša analiza otkriva: i) kreatori ekonomske politike su finansirali i do 50% ukupnog rasta troškova kamata emisijom novog javnog duga; ii) nakon izbijanja globalne finansijske krize vlada smanjuje primarni fiskalni bilans uprkos rastu troškova kamata i zaduživanja; iii) reakcija primarnog fiskalnog bilansa na troškove kamata oponaša reakciju primarnog fiskalnog bilansa na troškove zaduživanja; iv) mere štednje usvojene nakon kršenja fiskalnih pravila za gornju granicu javnog duga su se pokazale kao nedovoljne za stabilizaciju javnih finansija u Srbiji.
doi:10.5937/industrija44-12031 fatcat:3piinz5gkredhhatmyc3uv4fkq