Serbian External Debt Fell 1.5% in September on Stronger Euro

Serbia’s external debt fell 1.5 percent in September from the end of the previous month to 23.1 billion euros ($30.52 billion), helped by a strengthening of Europe’s single currency.

A rise in the euro value against the U.S. dollar pushed the Balkan nation’s foreign debt down 383 million euros, the National Bank of Serbia said in a statement posted on its website late yesterday. Public-sector debt accounted for 8.9 billion euros, while private sector owed 14.2 billion euros to foreign creditors, the Belgrade-based bank said.

“The foreign debt-to-gross domestic product ratio, which indicates the country’s external solvency, fell slightly below the 80 percent level of high indebtedness to 77.1 percent at the end of September,” the Narodna Banka Srbije said. The debt-to- GDP ratio stood at 77.9 percent at the end of June, it said.

Better external indicators were one of the top reasons for Fitch Ratings raising the outlook on Serbia’s credit rating to “stable” from “negative” earlier this month.

The improvement resulted mainly from a reduction in private sector’s foreign debt, while the government’s debt to external creditors remained unchanged between June and September, the bank said.

Debt repayments, measured against GDP, fell to 9.5 percent in the third quarter after having peaked at 12.7 percent in the first three months of the year. Compared with merchandise and services exports, the debt-servicing ratio fell to 27.5 percent from 42.7 percent in the first quarter, the bank said.

Public debt, a mix of official foreign-exchange liabilities to external and domestic creditors, deteriorated in the third quarter, with public debt-to-GDP ratio rising to 38.8 percent of GDP from 32.9 percent as the start of the year.

Measured against annual budget revenue, the public debt servicing ratio has risen by almost 15 percentage points since the end of 2009 to 98 percent.

To contact the reporter on this story: Gordana Filipovic in Belgrade at gfilipovic@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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