Serbia set to repay $411 million debt early to World Bank

BELGRADE – Higher than expected privatization revenues will enable Serbia to repay in November a $411 million debt to the World Bank which was due by 2009, Finance Minister Mladjan Dinkic said. «The ministry has proposed an early repayment of $411 million debt to the World Bank… for the period 2007 to 2009,» he said. «Instead of repaying it over the next three years we will pay everything this year.» Privatization revenues are seen hitting $4.1 billion this year from a previously forecast $3.5 billion, itself a upwardly revised estimate. Serbia will also make an early repayment of 8.7 billion dinars ($133 million) as a tranche of its debt to pensioners, which was accumulated under the regime of the late Slobodan Milosevic and due to be fully repaid by 2010. Dinkic said that even with the early repayments the budget surplus this year will be some 2 percent of GDP, higher than the 0.7 percent planned under the 2006 revised budget. Besides the higher than expected privatization receipts, the reason for the further upward revision is that only a third of the investments earmarked for domestic projects would actually take place this year, leaving the rest to be carried over to 2007. «With the considerably bigger revenue it is rational to repay part of the debts and reduce our debt burden,» Dinkic said. The government has earlier said it planned to reduce the nation’s overall debt burden by $2.5 billion to $3.5 billion by the end of 2007. Serbia’s total external debt stood at $17.27 billion at the end of June.