ANALYSIS OF THE REPUBLIC OF SERBIA S DEBT. June 2011

ANALYSIS OF THE REPUBLIC OF SERBIA S DEBT June Belgrade, August

Analysis of the Republic of Serbia s debt А. External debt At end-june, external debt of the Republic of Serbia totalled EUR 22.7 bln, up by EUR 62.5 mln from end-march. External debt of the public sector rose EUR 277.1 mln, while that of the private sector fell by EUR 214.6 mln. Due to exchange rate differentials, notably appreciation of the euro against the dollar and SDRs in Q2, external debt declined by EUR 13.6 mln, resulting in lower debt growth in nominal terms. The largest portion of external debt (77.3%) was denominated in euros. The US dollar accounted for 9.4%, SDRs for 8.5% and the Swiss franc for 4.1%. The remaining 0.7% of external debt was denominated in other currencies. The external debt maturity structure improved short-term debt declined from 4.9% at end-march to 4.3% at end-june, in response to a cutback in banks short-term debt. Chart 1 Serbia's external debt by debtor (% of GDP) 90 80 70 60.9 60.2 64.6 77.9 82.1 77.0 74.8 60 50 40 30 20 10 0 2006 2007 2008 2009 2010 M arch Јune Republic of Serbia Banks Total debt NBS Enterprises Source: National Bank of Serbia. The share of external debt in estimated GDP, as an external solvency ratio, stood at 74.8% at end-q2, which is below the level indicating high indebtedness (80%). This ratio improved by 2.2 pp from a quarter earlier on account of a rise in estimated GDP, led chiefly by the dinar s appreciation. The share of private sector external debt in estimated GDP equalled 44.8%. The ratio of external debt to 12-month exports of goods and services inclusive of remitances 1 increased by 2.4 pp to 167.4%, still remaining within the bounds of sustainability (up to 220%). External debt repayments came to 11.2% of estimated GDP in Q2, of which 9.1% of GDP related to the repayment of the principal and 2.1% to the repayment of interest. The ratio of external debt repayments to exports of goods and services equalled 30.9% in Q2. Adding remittances 1 to exports, the share of repayments in GDP was 25.1%, which is within the bounds of sustainability (25 30%). 1 According to the World Bank methodology presented in the publication World Development Indicators, within external liquidity indicators, debt repayments can be analysed in relation to exports of goods and services, inclusive of remittances since they represent a stable and significant inflow. The same applies to external debt within external solvency indicators. 1

Table 1 Indicators of Serbia' external position External liquidity indicators (in %) 2006 2007 2008 2009 2010 I II Foreign reserves/imports (in months) 9.0 7.2 5.2 9.4 8.1 7.7 7.5 Foreign reserves/short-term debt 941.7 917.5 380.8 528.8 546.4 889.1 1031.6 Foreign reserves/gdp 38.7 33.8 25.0 36.7 34.5 33.7 32.8 Debt repayment/gdp 7.0 10.1 10.6 11.5 11.8 14.6 11.2 Debt repayment/exports 23.5 33.2 34.0 39.1 34.0 40.4 30.9 Debt repayment/exports and remittances 17.2 25.4 27.6 28.3 26.1 31.3 25.1 External solvency indicators (in %) External debt/gdp 60.9 60.2 64.6 77.9 82.1 77.0 74.8 Short-term debt/gdp 4.1 3.7 6.6 6.9 6.3 3.8 3.2 External debt/exports 204.1 197.3 207.6 265.3 236.2 213.0 206.3 External debt/exports and remittances 149.1 151.1 168.7 191.8 181.2 165.0 167.4 Source: National Bank of Serbia. Methodological explanations: - Foreign reserves/imports of goods and services (in months) - ratio of foreign reserves at the end of the period observed and the average monthly imports of goods and services during the same period. - Foreign reserves/short-term external debt ratio of the stock of foreign reserves and the stock of short-term external debt at the end of the period observed. - Foreign reserves/gdp ratio of the stock of foreign reserves at the end of the period observed and GDP in the last four quarters. - External debt repayment/gdp ratio of external debt repayment and GDP during the period observed. - External debt repayment/exports of goods and services ratio of external debt repayment and exports of goods and services during the period observed. - External debt repayment/exports of goods and services plus remittances ratio of external debt repayment and exports of goods and services plus remittances during the period observed. - External debt/gdp ratio of the stock of external debt at the end of the period observed and GDP in the last four quarters. - External debt/exports of goods and services ratio of the stock of external debt at the end of the period observed and the value of exports of goods and services over the last 12 months. - Short-term external debt/gdp ratio of the stock of short-term external debt at the end of the period observed and GDP in the last four quarters. `- External debt/exports of goods and services ratio of the stock of external debt at the end of the period observed and the value of exports of goods and services over the last 12 months - External debt/exports of goods and services plus remittances ratio of the stock of external debt at the end of the period observed and the value of exports of goods and services plus remittances over the last 12 months. 1. Public sector external debt 2 came at EUR 9.1 bln at end-june and its share in total external debt at 40.2%. External debt of the government and the NBS amounted to EUR 8.4 bln and government-guaranteed debt to EUR 700.0 mln. Total public sector borrowing reached EUR 328.5 mln in Q2 (EUR 407.2 mln disbursements; EUR 78.7 mln repayments of the principal). Three new public sector credit arrangements were concluded and ratified by the National Assembly in Q2. The arrangements are worth EUR 418.9 mln in total (EUR 200.0 mln from EIB for Fiat Compact Cars Serbia, with the guarantee of the Republic of Serbia, EUR 150 mln from EIB Apex loan for SMEs and EUR 68.9 mln from the World Bank Second Public Expenditure Development Policy Loan Program). 2. Private sector external debt amounted to EUR 13.6 bln at end-june, of which banks accounted for EUR 4.3 bln and enterprises for EUR 9.3 bln. Total debt of the banking sector 2 Following the IMF s methodology, the Republic of Serbia s external debt figure also includes public debt liabilities, which, in addition to the old rescheduled debt and new government borrowing, encompass NBS liabilities, non-regulated RS liabilities including clearing debt, as well as a portion of debt of local governments and state agencies that is not government-guaranteed. 2

declined by 1.7%, reflecting primarily the drop in short-term debt, while enterprise debt fell by 1.5%. The private sector accounted for 59.8% of total external debt. In Q2, the private sector net repaid EUR 110.4 mln of its long-term debt (total disbursements were EUR 376.9 mln and repayments of principal EUR 487.3 mln). The largest repayments were recorded in the following sectors: information and communication (EUR 50.9 mln), manufacturing (EUR 41.6 mln), financial leasing (EUR 36.2 mln), wholesale and retail trade (EUR 19.0 mln), mining (EUR 12.3 mln), transportation and storage (EUR 12.1 mln) and other sectors (EUR 9.6 mln). In regard to long-term loans, borrowing was recorded in the sectors of professional, scientific and technical activities (EUR 34.9 mln), other financial intermediation, including banks (EUR 18.5 mln) and real estate activities (EUR 18.0 mln). In Q2, new long-term private sector loans were worth EUR 1,153.3 mln EUR 283.0 mln in the banking sector and EUR 870.3 mln in the enterprise sector. Chart 1 External debt by creditor (as at 30 June ) Foreign governments and development banks 4.3% London Club 2.9% Paris Club 6.8% IFIs 29.0% Other creditors 56.9% Clearing 0.1% Source: National Bank of Serbia. 2.1. The terms of banking sector borrowing changed from Q1. The weighted average interest rate on loans concluded in Q2 rose 0.8 pp from a quarter earlier to 3.6%. The share of variable interest rate loans measured 93.8%, up by 10.5 pp from Q1. The average maturity of loans contracted in Q2 was 6 years and 3 months, which is 3 months longer than in the quarter before. 2.2. As regards the terms of borrowing of the enterprise sector, the weighted average interest rate was 3.7%, down by 1 pp from a quarter earlier. Variable interest rate loans made up 93.7% of total loans contracted in Q2, up by 16.7 pp on Q1. The average maturity of loans contracted in Q2 was 7 years and 9 months, up by 3 years and 6 months on the previous quarter. In Q2, of total long-term loans disbursed by the enterprise sector, 51.8% were extended by foreign banks and financial institutions related to domestic banks, 22.9% by foreign enterprises related to domestic borrowers, and 25.3% by other creditors. Loan repayments of enterprises continued to exceed new disbursements in Q2. 3

B. Public debt At end-june, public debt of the Republic of Serbia amounted to EUR 13.3 bln 3, or 43.7% of estimated GDP. Since the start of the year, public debt has increased by EUR 1.1 bln or 1.8 pp of GDP, reflecting almost entirely the rise in internal public debt. External public debt, by contrast, rose by not more than EUR 74.1 mln. The increase in the stock of public debt is for its major part attributable to government borrowing through issue of long-term dinar bonds. Chart 3 Public debt of the Republic of Serbia (EUR bln) (in %) 14 12 10 8 6 4 2 0 40.1 31.8 26.9 34.1 2006 2007 2008 2009 2010 M arch Internal debt - lef t scale External debt - lef t scale 41.9 Public debt as % of GDP - right scale 43.5 43.7 June 45 40 35 30 25 20 15 10 5 0 Source: RS M inistry of Finance and National Bank of Serbia. In line with this, the currency structure of public debt changed significantly in Q2. Thus, the share of dinar-denominated public debt rose from 15.8% in March to 18.5% in June. The euro accounted for 59.9% of public debt (including a portion of euro-indexed debt) 4, and other currencies including SDRs for 21.6%. Table 2 Stock of the Republic of Serbia's public debt (EUR bln) 2006 2007 2008 2009 2010 31 March 30 June Internal debt 3.8 3.5 3.2 4.2 4.9 5.6 6.0 External debt 5.5 5.5 5.6 5.7 7.3 7.1 7.3 TOTAL 9.4 9.0 8.8 9.8 12.2 12.7 13.3 Source: RS Ministry of Finance. 3 Public debt of the Republic of Serbia is shown according to the methodology of the RS Ministry of Finance. Following that methodology, external public debt does not include NBS liabilities, non-regulated RS liabilities including clearing debt, and a portion of debt of local governments and state agencies that is not government-guaranteed. 4 A portion of public debt indexed to the euro includes the December issue of 6-month treasury bills in the amount of RSD 21.0 bln. 4

The public debt interest structure altered in the desired direction as well the share of debt contracted at fixed rates amounted to 69.6% at end-june (vs. 67.9% in March). A major part of variable interest rate debt remained linked to the euro EURIBOR and LIBOR (84.2%), a smaller part to the US dollar and Swiss franc LIBOR (10.5% and 2.6% respectively), and the rest to other interest rates (2.7%). The table below gives an overview of the generally accepted measures of debt sustainability: the ratio of the stock of debt and annual debt repayments to GDP, exports (and remittances) and budget revenue. Table 3 Measures of public debt sustainability (in %) Debt/GDP 40.1 31.8 26.9 34.1 41.9 43.1 43.7 Debt/exports 134.6 104.1 86.5 116.2 120.7 119.3 120.6 Debt/exports and remittances 98.3 79.7 70.3 84.0 92.7 92.9 94.1 Debt/budget revenue 93.2 74.1 64.1 83.3 102.5 105.9 108.8 Debt repayment/gdp 4.9 2.8 1.8 6.1 9.2 9.5 10.4 Debt repayment/exports 16.3 9.2 5.8 20.9 26.6 26.2 28.7 Debt repayment/exports and remittances 11.9 7.0 4.8 15.1 20.4 20.4 22.4 Debt repayment/budget revenue 11.3 6.6 4.3 15.0 22.6 23.3 25.9 Source: RS Ministry of Finance and National Bank of Serbia. Methodological explanations: 2006 2007 2008 2009 2010 Q1 Q2 - Public debt/gdp ratio of the stock of public debt at the end of the period observed and GDP in the last four quarters. - Public debt/exports of goods and services ratio of the stock of public debt at the end of the period observed and the value of exports in the last 12 months. - Public debt/exports of goods and services plus remittances ratio of the stock of public debt at the end of the period observed and the value of exports and remittances in the last 12 months. - Public debt/budget revenue ratio of the stock of public debt at the end of the period observed and budget revenue in the last 12 months. - Public debt repayment/gdp ratio of public debt repayment and GDP during the period observed. observed. - Public debt repayment/exports of goods and services plus remittances ratio of public debt repayment and exports and remittances during the period observed. - Public debt repayment/budget revenue ratio of public debt repayment and budget revenue during the period observed. Judging by the public debt to GDP ratio, the pace of government borrowing slowed in Q2. The share of public debt in GDP rose 0.6 pp to 43.7% 5, but this is for its major part due to GDP growth, because nominal public debt growth remained high (in Q2 government debt increased by EUR 590.9 mln compared to EUR 539.1 mln in Q1). Though this is quite understandable in view of the budget financing needs (4.1% of GDP), it should be noted that a part of the increase in euro terms is attributable to exchange rate differences given that already now a significant 18.5% of total public debt is denominated in the dinar which appreciated in Q2. Public debt under sold government securities 6 went up in Q2 by RSD 54.3 bln to RSD 304.9 bln at end-june. 7 5 The Budget System Law caps public debt at 45% of GDP. 6 Including euro-denominated government securities. 7 Public debt statistics records government borrowing based on the nominal value of securities. Under the discount value, the stock of public debt under securities increased in Q2 by RSD 46.5 bln to RSD 273.8 bln at end-june. The difference becomes all the more important as the maturity of issued securities extends. The ratio of public debt to GDP would be by 1 pp lower in June (42.7% instead of 43.7% of GDP) if securities were recorded at the discount and not the nominal value. 5

Effective rates on T-bills with maturity up to one year declined in Q2. Demand exceeded supply in nearly all auctions, and the auction sales rate was high (98%). The decline in effective rates on government securities with maturities over one year halted in Q2 reflecting increased volume of issue and almost unchanged auction sales rate. During Q2, two auctions of eurodenominated government securities were held. These securities have a semi-annual coupon payment and a fixed interest rate of 5.0% for 3-year maturity and 5.85% for 15-year maturity. Of the auctioned EUR 202.6 mln, bonds worth EUR 105.8 mln nominally were sold. Effective rate on 3-year securities is comparable to the yield rate on frozen FX savings bonds. Chart 4 Maturity structure of government debt under sold T-bills Chart 5 Effective rates on T-bills and NBS key policy rate (RSD bln) 320 280 240 200 160 120 80 40 0 6 2010 7 8 9 10 11 12 1 2 3 4 5 6 (in %, at annual level) 16 15 14 13 12 11 10 9 8 7 6 5 4 6 2010 7 8 9 10 11 12 1 2 3 4 5 6 3М 6М 12М 18М 24М 36M dinar-denom. 6М euro-index. 53W euro-denom. 15Y euro-denom. 3Y euro-denom. Source: M inistry of Finance. Key policy rate Effective rate 6М Effective rate 18М Effective rate 6М euro-index. Effective rate 53W euro-denom. Effective rate 3Y euro-denom. Effective rate 3М Effective rate 12М Effective rate 24М Effective rate 36М Effective rate 15Y euro-denom. Source: M inistry of Finance. 6

Appendix 1 External debt of the Republic of Serbia (preliminary data as at 30 June ) Sector / Creditor Outstanding Debt (principal) Principal Arrears Interest Arrears in million EUR USD/EUR= 0.6894 Late Interest Total 1 2 3 4 5=1+3+4 TOTAL EXTERNAL DEBT 22,442.4 1,548.8 292.0-22,734.3 1. PUBLIC SECTOR BORROWING 9,137.8 - - - 9,137.8 1.1. Medium and long-term debt 9,137.8 - - - 9,137.8 1.1.1. Monetary Authority - National Bank of Serbia 1,571.2 - - - 1,571.2 IMF 1,506.2 - - - 1,506.2 China - restructured finan. loan in amount of 100 mln USD 65.1 - - - 65.1 1.1.2. General Government 7,566.5 - - - 7,566.5 1.1.2.1. Central Government - total 7,344.6 - - - 7,344.6 1.1.2.1.1. Central Government debt 6,656.8 - - - 6,656.8 Multilateral institutions 3,362.9 - - - 3,362.9 IMF SDR_allocation 427.7 - - - 427.7 IBRD - consolidated debt 1,116.5 - - - 1,116.5 IBRD 226.7 - - - 226.7 IDA 493.3 - - - 493.3 European Community 273.3 - - - 273.3 EIB 791.9 - - - 791.9 EIB - old regulated debt 3.5 - - - 3.5 EUROFOND-CEB 28.5 - - - 28.5 EBRD 1.5 - - - 1.5 Foreign Governments and goverments' development banks 2,136.4 - - - 2,136.4 Paris Club_Consolidated debt 1) 1,547.0 - - - 1,547.0 o/w capitalized interest 2) 72.9 - - - 72.9 Goverments 520.4-520.4 Governments - Libya 38.0 - - - 38.0 Governments' development banks 31.0 - - - 31.0 London Club - regulated debt 3) 667.4 - - - 667.4 Other Creditors 468.9 - - - 468.9 -o/w IBRD guarantee 292.6 292.6 Debt in non-convertible currency 21.2 - - - 21.2 1.1.2.1.2. Central Government - guaranteed debt 687.8 - - - 687.8 Multilateral institutions 562.0 - - - 562.0 EUROFIMA 97.9 - - - 97.9 EBRD 366.6 - - - 366.6 EIB 97.5 - - - 97.5 Governments' development banks 52.4 - - - 52.4 Other Creditors 73.5 - - - 73.5 1.1.2.2. Government - Funds and Agencies 66.5 - - - 66.5 EUROFOND-CEB - guaranteed consolidated debt 1.5 - - - 1.5 Other Creditors - non-guaranteed debt 65.0 - - - 65.0 1.1.2.3. Local Governments - total 155.4 - - - 155.4 1.1.2.3.1. Local Governments - non-guaranteed debt 144.6 - - - 144.6 EIB 10.2 - - 10.2 EBRD 133.3 - - - 133.3 Other Creditors 1.2 - - - 1.2 1.1.2.3.2. Local Governments - guaranteed debt 10.8 - - - 10.8 EBRD 10.8 - - - 10.8 1.2. Short-term Debt - - - - - 7

2. PRIVATE SECTOR BORROWING* 13,304.6 1,548.8 292.0-13,596.6 2.1. Medium and long-term debt 12,340.2 1,517.4 290.1-12,630.4 2.1.1. Banks 3,410.8 6.9 2.6-3,413.4 International financial organizations 696.9 5.7 0.7-697.6 EIB 158.9 1.9 0.2-159.1 EBRD 226.9 1.5 0.2-227.2 EFSE 141.8 - - - 141.8 IFC 169.3 2.3 0.3-169.5 Governments' development banks 224.1-0.2-224.3 Other Creditors 2,489.8 1.2 1.6-2,491.5 -o/w MIGA insurance 8.0-0.1-8.1 2.1.2. Enterprises 8,929.4 1,510.4 287.6-9,217.0 International financial organizations 297.2 12.4 3.0-300.2 EBRD 185.1 8.3 2.5-187.6 IFC 80.2 1.3 0.4-80.6 EIB 12.4 1.2 0.0-12.4 EUROFOND-CEB 19.5 1.7 0.0 19.5 Governments' development banks 48.8 0.2 1.0-49.8 Other Creditors 8,583.5 1,497.7 283.6-8,867.0 -o/w MIGA insurance 133.1 2.0 0.5-133.5 2.2. Short-term Debt 964.4 31.4 1.8-966.2 2.2.1. Banks 894.7 - - - 894.7 Bank deposits and credit lines 894.7 - - 894.7 Other Creditors - - - - - 2.2.2. Enterprises 69.7 31.4 1.8-71.6 Governments' development banks 8.0 8.0 Other Creditors 52.5 31.4 1.8-54.3 Russia - Trade debt for gas import 9.2 - - - 9.2 Source:National Bank of Serbia NOTE: Since September 2010 methodology for the external debt statistics has been changed so that the external public debt includes obligations under the IMF SDR allocation (EUR 427.7 mill), which was used in December 2009, as well as capitalized interest to Paris Club creditors (EUR 72.9 mill), while the loans concluded before December 20, 2000, under which the payments have not been effected, are excluded from the external debt of the private sector (EUR 818.9 mill of which EUR 377.8 mill relate to domestic banks and EUR 441.1 mill to domestic enterprises). *It is estimated that arrears are overestimated due to the failure to submit the data in time. 1) Debt owed to Paris Club Creditors was consolidated in 2001 when it was agreed that 66% of debt will be cancelled; the first phase of reduction of 51% of debt was implemented on March 22, 2002, while the second phase of reduction of additional 15% of debt - on February 6, 2006. 2) Pursuant to the provisions of the Agreed Minute signed with the Paris Club Creditors, in the period March 2002 December 2005, 60% of interest is capitalized and will be serviced starting from 2007 to 2014. 3) In accordance with the Memorandum of Understanding on the Debt Restructuring which the Republic of Serbia signed on 7 July 2004 with the London Club Creditors, approximately 62% of debt was cancelled. 8

Appendix 2 Stock and flow of Serbia's external debt PRELIMINARY DATA in million EUR* Jan. - June 10 Total 2010 January 11 February 11 March 11 April 11 May 11 June 11 Total Change in 1 2 3 4 5 6 7 8 9 (3 to 8) 10 (9-1) Foreign net loans 166.87 813.75-617.14-83.52-95.96 243.34 1.15-159.44-711.57-878.44 A) Medium/long term, net (1.- 2.) 644.73 880.56-26.08-40.33-36.79 360.24-20.35-121.82 114.87-529.86 1. Disbursements (1.1.+ 1.2.) 2,009.77 3,600.83 169.58 189.33 313.19 517.56 164.01 102.44 1,456.11-553.66 1.1.official 656.26 1,232.39 18.89 39.48 24.75 354.29 32.13 20.72 490.26-166.00 o/w IMF 237.09 344.59 51.76 51.76-185.33 1.2. private (1.2.1.+ 1.2.2.) 1,353.51 2,368.44 150.68 149.86 288.44 163.27 131.87 81.72 965.85-387.66 1.2.1 banks 817.45 1,140.64 11.37 16.00 58.17 100.06 0.74 8.20 194.53-622.92 1.2.2. other private 536.06 1,227.79 139.32 133.86 230.27 63.22 131.14 73.52 771.32 235.26 1.2.2.1. other private borrowing from non-resident banks 293.24 419.55 74.43 81.39 202.07 19.43 87.30 17.77 482.39 189.16 2. Amortization - principle (2.1.+ 2.2.) 1,365.04 2,720.27 195.66 229.66 349.99 157.32 184.36 224.26 1,341.24-23.80 2.1. official 147.63 279.22 21.19 8.08 51.68 30.07 8.95 39.66 159.63 12.01 o/w IMF - - - - - - - 0.00 0.00 0.00 2.2. private (2.2.1.+ 2.2.2.) 1,217.41 2,441.05 174.47 221.58 298.31 127.25 175.40 184.59 1,181.61-35.81 2.2.1 banks 239.28 390.23 21.32 3.47 38.47 17.43 6.01 67.05 153.73-85.55 2.2.2. other private 978.13 2,050.82 153.15 218.12 259.84 109.83 169.39 117.54 1,027.87 49.74 2.2.2.1. other private borrowing from non-resident banks 496.28 1,028.84 53.36 169.55 118.29 51.19 103.36 60.74 556.49 60.21 3. Amortization - interest (3.1.+ 3.2.) 306.95 601.03 27.89 31.22 91.13 78.30 27.15 54.70 310.39 3.44 3.1. official 124.98 257.05 10.48 16.19 51.07 36.77 9.99 20.26 144.76 19.78 o/w IMF 10.32 20.50 0.71 5.57 0.12 5.69 12.08 1.76 3.2. private (3.2.1.+ 3.2.2.) 181.97 343.98 17.41 15.02 40.06 41.53 17.16 34.44 165.63-16.34 3.2.1 banks 42.76 94.03 3.70 3.04 19.21 4.92 2.87 18.66 52.40 9.64 3.2.2. other private 139.21 249.95 13.71 11.98 20.84 36.62 14.29 15.78 113.23-25.98 3.2.2.1. other private borrowing from non-resident banks 81.49 139.98 9.16 7.49 13.17 7.40 7.90 10.11 55.24-26.25 B) Short term, net (1.+ 2.) -477.86-66.80-591.06-43.19-59.17-116.90 21.49-37.62-826.45-826.45 1. official, net - 1.50-1.50 - - - - - - 0.00 0.00 2. private, net (2.1.+ 2.2.) -476.36-65.30-591.06-43.19-59.17-116.90 21.49-37.62-826.45-826.45 2.1 banks, net (2.1.1+ 2.1.2) -409.39 17.62-592.87-43.00-58.40-124.05 20.33-38.04-836.03-836.03 2.1.1 other short term credits, net -3.33-3.33 - - - - - - 0.00 0.00 2.1.2 deposit and credit lines, net -406.06 20.96-592.87-43.00-58.40-124.05 20.33-38.04-836.03-836.03 2.2. other private, net -66.96-82.92 1.80-0.19-0.77 7.15 1.17 0.42 9.58 9.58 in million EUR June 30, 2010 Dec.31, 2010 Jan.31, Feb.28, Mar.31, Apr.30, May 31, Jun. 30, in % GDP Change Jun. 30 in 1 2 3 4 5 6 7 8 9 10 (8-2) Stock of External Debt 23,456.22 23,786.42 22,990.89 22,927.08 22,671.88 22,730.28 22,897.01 22,734.33 74.8% -1,052.09 A) Official ( 1.+ 2.) 8,921.02 9,076.43 9,019.80 9,018.84 8,860.64 9,054.33 9,181.35 9,137.77 30.1% 61.34 1. Medium/long term 8,921.02 9,076.43 9,019.80 9,018.84 8,860.64 9,054.33 9,181.35 9,137.77 30.1% 61.34 2. Short term - - - - - - 0.00 0.0% 0.00 B) Private 14,535.20 14,709.99 13,971.09 13,908.24 13,811.24 13,675.95 13,715.66 13,596.56 44.8% -1,113.43 1. Medium/long term 13,076.16 12,879.59 12,733.86 12,716.64 12,695.62 12,679.08 12,703.02 12,630.35 41.6% -249.23 2. Short term 1,459.05 1,830.41 1,237.23 1,191.59 1,115.62 996.87 1,012.64 966.21 3.2% -864.20 Banks (1.+ 2.) 4,498.92 5,092.63 4,482.21 4,453.73 4,383.65 4,348.71 4,398.91 4,308.02 14.2% -784.61 1. Medium/long term 3,195.25 3,361.95 3,344.40 3,358.91 3,347.24 3,436.34 3,466.22 3,413.36 11.2% 51.42 2. Short term 1,303.67 1,730.69 1,137.82 1,094.82 1,036.42 912.37 932.69 894.65 2.9% -836.03 Other private (1.+ 2.) 10,036.28 9,617.36 9,488.88 9,454.51 9,427.58 9,327.24 9,316.75 9,288.55 30.6% -328.82 1. Medium/long term 9,880.91 9,517.64 9,389.46 9,357.73 9,348.38 9,242.73 9,236.80 9,216.99 30.3% -300.65 2. Short term 155.38 99.72 99.41 96.78 79.20 84.50 79.95 71.56 0.2% -28.17 Source:National Bank of Serbia * f/x on date of transaction 9

Appendix 3 Disbursements, repayments of principal and interest on long-term external loans of the private sector shown by economic sector, 1 January 30 June in million EUR ECONOMIC SECTORS Jan Feb Mar Apr May Jun TOTAL Sharing Exports 1) % Financial and insurance activities Disb. 11.83 62.84 139.51 102.20 1.76 13.56 331.69 34% Rep. princ. 38.74 91.38 132.94 32.99 11.27 95.52 402.84 Rep. int. 4.55 4.20 22.27 6.74 3.97 23.65 65.37 of which Monetary intermediation Disb. 11.37 16.00 58.17 100.06 0.74 8.20 194.53 20% Rep. princ. 21.32 3.47 38.47 17.43 6.01 67.05 153.73 Rep. int. 3.70 3.04 19.21 4.92 2.87 18.66 52.40 of which Financial leasing Disb. 33.00 77.02 2.00 4.00 116.02 12% Rep. princ. 17.24 73.08 92.11 11.90 2.28 28.04 224.66 Rep. int. 0.66 0.66 2.85 0.54 0.61 4.15 9.46 Real estate activities Disb. 21.00 46.80 23.24 16.22 49.05 2.63 158.93 16% Rep. princ. 44.57 62.78 29.47 6.80 40.71 2.39 186.72 Rep. int. 0.67 0.84 6.64 0.26 2.00 1.80 12.21 Wholesale and retail trade; repair of motor Disb. 34.45 10.72 8.02 11.05 37.05 23.86 125.14 13% vehicles and motorcycles Rep. princ. 21.79 13.03 25.71 45.27 18.29 27.42 151.51 Rep. int. 2.78 1.75 3.17 2.62 2.18 2.00 14.50 Transportation and storage Disb. 50.02 1.01 56.58 0.34 0.84 108.79 11% Rep. princ. 3.14 0.91 55.53 6.00 3.61 3.64 72.82 Rep. int. 1.89 0.85 0.84 1.26 0.27 0.38 5.49 Manufacturing Disb. 26.53 17.19 6.97 1.04 3.38 2.63 57.75 6% 3,570.20 Rep. princ. 33.07 7.68 29.87 19.24 11.33 18.10 119.29 Rep. int. 2.81 1.86 2.46 26.18 1.63 1.58 36.53 Mining and quarrying Disb. 0.06 0.10 24.93 9.35 0.53 20.69 55.66 6% 30.80 Rep. princ. 2.85 7.78 0.28 2.63 25.10 15.15 53.79 Rep. int. 0.57 2.14 1.31 1.00 1.76 0.86 7.64 Professional, scientific and technical activities Disb. 1.15 0.94 3.63 4.56 31.67 2.51 44.47 5% 1.60 Rep. princ. 1.39 4.74 0.77 0.45 1.05 2.31 10.70 Rep. int. 0.27 0.63 0.73 0.20 0.74 0.52 3.10 Information and communication Disb. 6.35 5.59 13.19 4.19 3.94 33.27 3% 23.70 Rep. princ. 11.68 26.98 5.97 4.20 57.52 10.55 116.90 Rep. int. 1.02 1.12 0.37 0.60 3.81 0.95 7.87 Construction Disb. 2.52 0.35 13.60 2.50 2.65 4.90 26.52 3% Rep. princ. 9.14 1.98 4.16 0.84 0.60 2.59 19.30 Rep. int. 2.43 1.10 1.37 1.38 0.41 1.40 8.08 Administrative and support service activities Disb. 1.01 2.91 2.21 0.02 2.97 9.13 1% Rep. princ. 5.64 1.10 11.34 5.09 2.02 2.42 27.61 Rep. int. 0.08 0.13 0.48 0.89 0.10 0.51 2.19 of which Renting and leasing of motor vehicles Disb. 1.00 2.40 1.00 2.50 6.90 1% Rep. princ. 5.63 1.08 7.48 4.65 1.98 2.38 23.19 Rep. int. 0.06 0.12 0.47 0.85 0.08 0.51 2.09 Agriculture, forestry and fishing Disb. 2.40 1.95 1.83 0.05 2.57 8.79 1% 321.00 Rep. princ. 0.98 2.29 1.09 0.66 2.40 1.63 9.05 Rep. int. 0.18 0.14 0.12 0.05 0.15 0.15 0.81 Accommodation and food service activities Disb. 0.48 0.15 0.83 0.20 0.50 2.17 0% Rep. princ. 0.55 0.39 0.85 2.62 0.32 0.75 5.48 Rep. int. 0.07 0.09 0.23 0.14 0.07 0.20 0.81 Arts, entertainment and recreation Disb. 0.18 0.01 1.25 1.44 0% 0.90 Rep. princ. 0.57 0.03 0.02 0.04 0.86 0.03 1.54 Rep. int. 0.04 0.01 0.02 0.17 0.03 0.05 0.32 Electricity, gas, steam and air conditioning supply Disb. 0.25 0.30 0.20 0.07 0.82 0% 73.50 Rep. princ. 0.02 0.12 1.80 1.94 Rep. int. 0.01 0.01 0.29 0.31 Education Disb. 0.45 0.15 0.21 0.81 0% Rep. princ. 0.39 0.39 Rep. int. 0.14 0.14 Water supply; sewerage, waste management and Disb. 0.15 0.14 0.29 0% 94.70 remediation activities Rep. princ. 0.35 0.12 0.18 0.42 0.33 0.29 1.70 Rep. int. 0.05 0.02 0.02 0.05 0.04 0.10 0.27 Other service activities Disb. 0.17 0.17 0% Rep. princ. 0.00 0.00 0.01 0.00 0.00 0.00 0.02 Rep. int. 0.00 0.00 0.00 0.00 0.00 0.00 Human health and social work activities Disb. 0% Rep. princ. 0.01 0.01 0.02 Rep. int. 0.00 0.00 0.00 TOTAL Disb. 150.68 149.86 288.44 163.27 131.87 81.72 965.85 100% 4,116.40 Rep. princ. 174.47 221.58 298.31 127.25 175.40 184.59 1,181.61 Rep. int. 17.41 15.02 40.06 41.53 17.16 34.44 165.63 Source: National Bank of Serbia 1) Serbia's exports totalled EUR 4,117 mln in. A table shows total amount of exports by economic sectors which was recorded during January - June, excluding EUR 0.6 mln for unclassified category. 10