Serbia is not threatened by stagflation or debt crisis due to the coronavirus pandemic, said today the Vice Governor of National Bank of Serbia Ana Ivkovic at the webinar entitled “Impact of the pandemic on financial institutions” organized by the Comokos TGI Group.
Ivkovic reminded that before the pandemic, Serbia had a steep curve of the fall in public debt, whose share in GDP was lowered to about 50 percent from the level of over 70 percent.
She pointed out that Serbia welcomed this crisis, which was recognized by numerous international financial institutions, in strong fiscal positions, which enabled it to bring a huge package of measures to support the economy and citizens, whose value is about 11 percent of GDP.
This year, he says, it is quite certain and realistic to expect that the share of public debt in GDP will increase, but it, according to NBS projections, will not exceed 60 percent.
Next year, we will return to the trajectory of falling public debt, which is in line with both the fiscal strategy and the parameters from our projections, so from that point of view we can say that Serbia is not in a situation where it could be threatened by a debt crisis, which is confirmed by the reports of the rating agencies, said Ivkovic.
As for the issue of stagflation, the Vice Governor of the NBS was categorical in the position that such a threat does not exist.
According to her, the decrease in inflation, which was recorded in the first part of the year, was influenced by volatile factors such as food prices, vegetables, as well as the movement of oil prices on the international market, but core inflation remained stable in the range of 1.3 to 1. 6 percent.
He expects that from the middle of the year, inflation will return to the corridor limits, and next year it will move around the lower limit of the corridor.
This means that inflation in Serbia remains stable and under the control of the NBS, which is predicted by the financial sector and the economy in surveys conducted by National Bank, Ivkovic pointed out, specifying that the inflation level will average around 2.0 percent in the coming period, Dnevnik reports.
