The cost of living and the perception of whether a country is too expensive or cheap are relative concepts that depend on many factors, including the economic situation, standard of living, personal preferences and comparison with other countries in the region, said assistant professor Veljko M. Mijušković from the Faculty of Economics in Belgrade.
Serbia is located in the region of Southeast Europe and has its own specific economic characteristics. Serbia is generally considered a country with a lower cost of living compared to many Western European countries. However, costs can vary and significantly deviate from the above, taking into account larger cities such as Belgrade, Novi Sad, Niš.
As Mijušković assessed, compared to other countries in the Southeast European region, Serbia is often perceived as a country with lower prices, which can be attractive for tourists and expats, as well as for people coming from more expensive countries. However, the economic situation and the cost of living are changing. The best example is the currently rather high trade margins in retail stores or the prices of square meters of real estate, especially in the capital, which make the cost of living higher and the economic situation less favorable.
How much does import dependence cost us and how much will it cost us in the future?
MIjušković also says that import dependence can have its advantages and disadvantages, and whether it is harmful or not for a country depends on the specific circumstances of that country. Here are some reasons why a country, including Serbia, may find high import dependence problematic:
Vulnerability to changes in the global market: When a country depends on imports for key resources or products, it becomes vulnerable to changes in the international environment, such as price fluctuations or supply disruptions. This can lead to unpredictable economic risks.
Decline in domestic production: Import dependence can encourage a decline in domestic production, leading to job losses, reduced innovation, and technological lag behind countries that are less dependent on imports.
Deficit in the foreign trade balance: If imports exceed exports, this can lead to a deficit in the foreign trade balance, which can cause pressure on the country’s currency, reduce foreign exchange reserves and increase debt.
Loss of sovereignty over key sectors: High import dependence in key sectors, such as energy or the food industry, can mean that a country does not have full control over its own supply and security.
Lack of diversification: If a country relies too heavily on imports of certain products or from certain sources, a lack of diversification can increase the risk of supply disruptions or changes in trade relations.
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