National Bank of Serbia expect a rapid decline in inflation in the coming years and a return to the expected values ​​in 2024

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Ana Ivković, Vice Governor of the National Bank of Serbia (NBS), presented on the panel “Is inflation transitory or is it here to stay?” at the 22nd Belgrade Economic Forum that two-thirds of the amount of inflation in Serbia is the result of the spillover of world energy and food prices to our market and that it can be expected to decrease next year

“We expect a rapid decline in inflation in the coming years and a return to the expected values ​​in 2024,” Ivković said during the discussion.

She explained that the infection arose before the war in Ukraine, after the pandemic crisis, when there was a sudden increase in demand on the world market, which the supply could not keep up with, so there was a problem with supply, and that after that the Ukrainian crisis got even worse the situation.

“Most central banks estimated that the crisis was short-term, but after the start of the war in Ukraine, the crisis became more permanent,” said Ivković. “We do not see inflationary pressures on the demand side, which is due to the reaction through the monetary policy of the NBS, and our market was not overheated and the dinar remained stable even at a time when there was panic in the world in March and April.”

She pointed out that the increase in the price of energy and food in the world by 65 to 70 percent affects domestic inflation.

Djuricin: The cause of the crisis lies in the structural imbalance of the model of liberal capitalism.

Professor Dragan Đuričin estimated that the cause of the crisis lies in the structural imbalance of the model of liberal capitalism that has been going on since the first decades of the last century.

“This led to the disruption of the macroeconomic foundations of the system, which led to a crisis of supply and demand and experimental economic policies and a huge expansion of money emission, which production did not support and there was a mismatch between supply and demand,” Djuricin assessed.

He stated that climate change, the covid crisis and the war only contributed to the worsening of the situation.

Djuricin said that the way out of the problem should be sought in the circular economy and other measures to adhere to the principles that rule in nature, and not those created by the elites.

“NBS measures produced results, regardless of the fact that they are experimental, which is dangerous, but we were lucky that they produced results. The solution is on the structural side, the situation cannot be resolved with monetary measures,” Djuricin warned.

Šoškić: Serbia could have had a lower inflation rate if it had dealt with energy and agriculture in the right way

Professor of the Faculty of Economics in Belgrade, Dejan Šoškić, believes that Serbia could have had a lower inflation rate if it had dealt with energy and agriculture in an appropriate way, which in earlier years were export-oriented, so it would be easier to defend against import inflation, which leads to an increase in energy and food prices.

Šoškić expressed his opinion that the NBS should have reacted by tightening the monetary policy a year ago, when the first signs of inflation appeared.

“Our base inflation is high, which is a sign that inflation has spilled over into inflationary expectations and now you have the phenomenon that employees expect their wages to rise, so this will further raise prices. This will lead to further tightening of monetary measures, which will bring down economic activity “, believes Šoškić.

He noted that the interest rates of commercial banks are lower than inflation and concluded that this means that the banks are losing money.

Vasić: Loans rose in price by 1.5 percent due to the tightening of the monetary policy of the NBS  

The General Secretary of the Association of Serbian Banks, Vladimir Vasić, stated that the prices of loans increased by 1.5 percent due to the tightening of the monetary policy of the NBS.

He also stated that the rate of non-performing loans is good, as it is 2.8 percent, which means that there is liquidity in the country and that loans are paid off regularly.

He confirmed the estimates of the NBS regarding the trend of inflation in the following period, which predicts a drop in inflation next year and a return to the planned level by the end of 2024, Kamatica writes.

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