Serbia’s budget deficit in the first quarter of this year was almost four times higher than in the same period of 2025. According to economists, the main reason for this was the January payment for the French Rafale fighter jets, combined with reduced state revenues due to weaker economic activity.
According to official data from the Ministry of Finance, the deficit for these three months reached 112.9 billion dinars. However, in the first quarter of last year, the deficit amounted to around 28.6 billion dinars.
As Danas previously reported, the total deficit last year amounted to 252.8 billion dinars, which means that last year’s total deficit would already be matched by July if the current pace continued.
Many factors affect budget expenditure – from capital spending, subsidies and interest payments to other costs – while the crisis caused by the war in Iran is also working against Serbia, as the state is losing part of its revenue due to reduced fuel excise duties.
If we look at the structure of the deficit over these three months, we can see that capital expenditure in January alone reached around 72.6 billion dinars, which is an exceptionally high level for the beginning of the year. This generally indicates intensive financing of infrastructure projects such as roads, railways and EXPO developments, which the state has prioritised in recent years. However, it appears that this was not the case in January.
According to Radar, Serbia paid the French company Dassault €204.6 million for 12 Rafale fighter aircraft towards the end of 2025, but by the end of January it had to pay an additional €480 million, or more than 56.2 billion dinars. Taking this into account, it appears that the first-quarter deficit was significantly driven by the payment for the Rafales, although the budget bulletin does not explicitly specify the structure of capital expenditure.
The bulletin also shows that industrial production in January fell by 9.1 per cent year-on-year, while imports declined by 15.4 per cent, directly affecting state revenues. Therefore, the deficit rose sharply primarily because expenditure – especially capital expenditure – grew much faster than revenues during what is seasonally a weak January.
Furthermore, what is causing further concern is yesterday’s statement by the President of Serbia, Aleksandar Vučić, who disclosed the amount Serbia may additionally have to spend in order to defend itself against the crisis.
As he stated, a joint assessment with the International Monetary Fund (IMF) showed that if the consequences of the wars in Iran and Ukraine continue for another year and a half, Serbia will have to spend an additional €1.5 to €2 billion.
(Danas, 07.05.2026)
https://www.danas.rs/vesti/ekonomija/deficit-budzeta-rafali-rashodi-bdp/
