Instead of being the least fiscally risky, the City of Belgrade is a thorn in the side of the International Monetary Fund. This is not due to the financial institution’s concern for the state of the capital’s public finances, but rather because of the potential consequences for the state budget.

An inability to finance its obligations would mean increased transfers, i.e., money from the state treasury. This then represents expenditure that was not initially accounted for. Consequently, such spending could affect the level of Serbia’s budget deficit. And the government, although this would not be the first broken promise made to the IMF, has given its word that the deficit will not exceed three per cent of GDP.

The government also promised the Fund that it would hire an external consultant who should conduct a detailed analysis of Belgrade’s finances by September this year. This consultant is expected to present the government with a comprehensive report on the state of play, in order to make the process of drafting the next budget less painful.

As stated, the report should include Belgrade’s current financial position, key risks, and key projections for the next three years.

Forbes Serbia has learned from well-informed sources that the consultancy firm Ernst & Young was hired to conduct the analysis. This took place at the end of May this year.

We have also learned that their analysts are having difficulties obtaining all the necessary information from city authorities to compile the requested report within the agreed deadline.

No answers to Forbes Serbia’s questions

Forbes Serbia sent an inquiry to the aforementioned consultancy firm regarding this analysis, but we received no response.

At the same time, we addressed questions to the Ministry of Finance, assuming it was responsible for hiring the consultant to conduct the analysis.

There is no evidence that any public procurement procedure was carried out to select the external consultant. We asked the Ministry of Finance about this, among other things, but received no response by the time of publication.

In other words, we have neither confirmation nor denial that Ernst & Young was chosen without a public call, i.e., a tender for the selection of a consultant. Nor have we received information on how much this service was paid and when the report is expected. The same applies to whether the allegations are true that officials in the city structures are not cooperating fully with the consultants who are supposed to gather data on the actual state of Belgrade’s treasury.

A third budget review cannot be ruled out

Our sources say they do not rule out the possibility of Belgrade’s budget undergoing a third review this year. The reason is the poor performance of the main public utility companies, as well as the growth of certain other expenditures facing the city.

Belgrade has reshuffled its treasury twice this year – first in the spring, and then at the beginning of the summer of this year. The latest review was allegedly done due to higher expected revenues. The fact remains that it also increased expenditures, as well as the city’s budget deficit.

As Forbes Serbia has already reported, instead of the initial 7.1 billion dinars, it will amount to 9.7 billion.

The losses of just three leading public utility companies – Beograd Put, the City Public Transport Company (GSP), and Beogradske Elektrane – exceeded 1.7 billion dinars at the end of 2025.

Beogradske elektrane is one of the largest debtors for gas to the public enterprise Srbijagas. GSP is also drowning in debt, which has increased several times over since the decision to introduce free public transport.

At the same time, the largest private carrier, Strela from Obrenovac, also claims that the city is not meeting its obligations under its contract in a timely manner. This contract engages the company as a city carrier on dozens of lines in the capital. They claim payment is delayed.

Strela performs increasingly well

As we have previously reported, the profits of Strela Obrenovac are growing year on year, while GSP’s business is deteriorating.

The financial report of this company for 2025 shows that total revenues grew by almost 100 per cent. Namely, Strela Obrenovac had total revenues of 13.9 billion dinars last year, whereas a year earlier they stood at 6.9 billion.

At the same time, net profit increased from 877 million to as much as 2.5 billion dinars. According to the same reports, the company had 1,188 employees last year.

Admittedly, by a recent decision of the President of Serbia, this company practically lost a contract it had already won. Namely, the procurement launched by the city in March – to secure a carrier that would take over additional city routes from GSP – was halted.

Furthermore, as previously claimed by the GSP trade union, the EXPO 2027 enterprise also requested the City of Belgrade to have Strela take over the routes that will run for the purposes of hosting this international exhibition.

A risk to the state budget

Our sources familiar with the state of Belgrade’s treasury tell us that it is not alarming. However, it is obvious that something in the structure of Belgrade’s budget must change. This is especially true for the way the most important city enterprises function, as the situation could otherwise become unsustainable.

Insiders believe that the return of ticket charging in city transport will not happen before the elections, but that this is emerging as one of the solutions to mitigate GSP’s losses.

They do not believe Belgrade could become an overnight noose around the neck of the state treasury – which is why the analysis of the city’s financial capabilities was promised to the IMF. Nevertheless, continuing with this policy of managing city finances makes even such a scenario not unimaginable.

They doubt that the public will find out in September how things actually stand, i.e., how serious the situation is. This is especially the case if indeed consultants cannot access the necessary information in time to complete an efficient and timely analysis.

(Forbes Serbia, 17.07.2026)

https://forbes.n1info.rs/novac/istrazujemo-sta-je-bilo-sa-analizom-finansija-prestonice-beograd-rizican-za-republicki-budzet/