BELGRADE - Serbia paid off $1.03 billion debt to creditors in a single day, using funds from its budget surplus and reducing its overall public shortfall by 2 percentage points, Finance Minister Sinisa Mali said on Tuesday.

After the payment, Serbia's public debt fell from 56.1 percent to 54.1 percent, he said in a statement. "We did not do it from borrowing...but from budget savings we have made."

Serbia will end 2018 with a budget surplus and plans a deficit of 0.5 percent next year in line with recommendations of the International Monetary, Fund which maintains a non-financial arrangement with Belgrade.

On Nov. 20, Serbia's debt agency bought back three-year treasury bonds worth 10 billion Serbian dinars (84.81 million euros) with a 2.9 percent coupon. The bonds are initially set to mature on Feb. 22, 2019. Belgrade also plans to buy back another 10 billion dinars on Dec. 18.

(1 euro = 117.9062 Serbian dinars)

(Reporting by Aleksandar Vasovic Editing by Mark Heinrich) ((aleksandar.vasovic@thomsonreuters.com; +381113044930;))