Here’s how the state plans to address the public debt problem – New risk management software, tools for business intelligence and primary dealers

Although there’s increasingly more criticism toward the state about the fast growth of the public debt and its getting closer to the set limit of 60% of the GDP, the president of Serbia, Aleksandar Vucic, has promised that the limit will not be crossed, and the state has now decided to work on making public debt management more efficient within the Program of Reform of Public Finance Management for 2021-2025.

Within the planned reform measures in said five-year period, the Public Debt Administration is planning a few steps in that direction.

The first, the document says, is the preparation of a software solution for a new risk management model.

– Its implementation will considerably contribute to the capacity of the Public Debt Administration, in the processes of analysis of the relation between the risk and the borrowing costs – the program says.

The Public Debt Administration also plans to upgrade the existing public debt management software by 2025 (PDMS) by implementing business intelligence tools.

This, it is pointed out, will enable progress in reporting and enable an easier maintenance of the public debt management system.

Finally, the Public Debt Administration will also consider the introduction of a system of primary dealers for the further development of the local market of debt securities.

Primary dealers are financial institutions that the Ministry of Finance would designate for affairs concerning securities and for the upgrade of the primary and the secondary markets of securities for the purpose of reducing the public debt, in cooperation with the state.

– The introduction of a system of primary dealers is one of the steps toward the further development of the securities market on a local level. This is expected to create the conditions for the generation of a greater volume of demand for state securities, that is, an increase of the degree of liquidity of government bonds in the local primary market, with certain effects that are expected for the secondary trading – the document says.

B. P.