Jorgovanka Tabaković, Governor of the National Bank of Serbia (NBS), has emphasized the significant economic changes Serbia has undergone over the past 12 years. Reflecting on her tenure, Tabaković noted that Serbia is now halfway to achieving an investment-grade rating.
According to Tabaković, Serbia has successfully stabilized its economy with inflation rates comparable to those of Central Europe. The country now boasts a stable currency, a robust financial system, substantial foreign exchange reserves and a well-managed public finance system. Additionally, Serbia has seen strong export growth and a sustainable external position.
Tabaković highlighted the achievement of reducing inherited high inflation from 12.2% at the end of 2012 to just 2.2% by the end of 2013. This low inflation rate was maintained at 2.2% on average for the next eight years, until global inflationary pressures emerged in 2021. During the period from 2009 to 2013, Serbia’s average inflation was significantly higher than that of Central Europe, but post-2013, it aligned with the region’s averages.
She also pointed out the record high coverage of the average consumer basket by the average wage, which reached 93.5% in the first five months of 2024, up from 65.9% in 2013. Similarly, the ratio of the minimum consumer basket to the minimum wage improved to 88.9% from 58.7% in 2013, reflecting a significant increase in citizens’ living standards despite global economic challenges.
Tabaković commended the NBS’s efforts to maintain the stability of the dinar against the euro, noting a nominal appreciation of 1.3% over the past 12 years. The NBS’s foreign exchange market interventions have increased foreign exchange reserves to a historic high of 28.1 billion euros as of July 2024, a significant rise from 10 billion euros in July 2012. The net foreign exchange reserves also grew more than fourfold, from 5.5 billion euros to 23.9 billion euros.
The NBS Governor also highlighted the substantial increase in gold reserves, which have more than tripled in quantity and increased fivefold in value since August 2012. Dinar savings have seen a dramatic rise, reaching nearly 165 billion dinars, while foreign currency savings have surpassed 15 billion euros, an 80% increase over the past 12 years.
Tabaković praised the establishment of price stability, which has enabled prolonged periods of low interest rates on dinar loans. The reference interest rate was reduced from 11.75% in 2012 to 1% by the end of 2020, leading to significantly lower borrowing costs for both the economy and citizens.
The share of problem loans in the banking sector has decreased to below 3% from around 20% in 2012. The NBS’s measures, including temporarily capping interest rates on housing loans in euros, have helped lower loan installments by up to 25%.
Under Tabaković’s leadership, the NBS has also resolved long-standing issues with unreasonable interest charges and exchange rate discrepancies on loans, saving citizens significant amounts. Moreover, the governor highlighted the expansion of Serbia’s export sector, which nearly quadrupled from 11.5 billion euros in 2012 to 41 billion euros in 2023. Foreign direct investments totaled 34 billion euros over the past 12 years, with a record inflow of 4.5 billion euros in 2023, contributing to job creation and economic stability.
Tabaković’s contributions were recognized internationally when she was named the best governor in the world and Europe by The Banker in January 2020.
