Danica Popović, a retired full professor of Macroeconomic Models at the Faculty of Economics in Belgrade, criticized the government’s handling of inflation data, particularly in light of the significant increase in food prices.
Popović highlighted that despite Prime Minister Miloš Vučević’s intentions to involve the Security and Information Agency and the National Bank of Serbia (NBS) to investigate price inflation, the current data does not provide a realistic picture of economic conditions. According to her, the NBS’s explanations should go beyond listing past events and address the current inflationary pressures directly.
She pointed out that the responsibility for rising prices lies not with civil servants but with policymakers whose monetary policies influence inflation. Popović’s comments came in response to NBS Director General Savo Jakovljević’s statement that inflation has not negated salary and pension growth. Jakovljević reported that from 2021 to 2023, inflation and average salaries increased at rates that have varied but generally showed salary growth outpacing inflation.
However, Popović criticized the relevance of this data, citing that the average salary figures do not reflect the true economic reality for many workers. She noted that, according to the Republic Statistical Office (RZS), as of May this year, the average salary was about 100,000 dinars, but half of employees earned less than 77,570 dinars. This disparity, she argues, undermines the significance of average salary data for the majority of workers.
Popović also expressed concern that the government’s approach to salary and pension increases, including the injection of additional funds when necessary, is often driven by political motives rather than genuine economic improvement. She suggested that political considerations might skew the distribution of benefits and exacerbate disparities.
Additionally, Popović criticized Serbia’s position in terms of minimum wage and GDP, noting that the country remains at the lower end of European rankings, with only a few neighboring countries positioned similarly or worse. She emphasized that this ranking has not changed significantly over the past 50 years, with only slight improvements compared to Montenegro.
Finally, Popović warned against relying solely on increasing wages as a solution to economic challenges, arguing that such measures could further fuel inflation. Instead, she advocates for substantial economic growth before making changes to minimum wages.
