Serbia, The average interest rate on loans in dinars reached 12.39 percent

Published on 21. March 2023., News

Citizens and businessmen in Serbia who have any loan with a variable interest rate face large increases in installments, and when looking at dinar loans, the average interest rate for new loans to households is now 12.92 percent, a full 4.39 percent more than a year ago, Demostat announced, and Beta agency reported.

The research and publishing center Demostat added that the biggest part of the increase in earnings on the difference between interest on loans and interest on savings to banks came from citizens, not from the economy, and that banks used the monetary authorities’ struggle with inflation to increase their earnings.

“Since July last year, the European Central Bank has raised its interest rates as many as six times – from zero to 3.5 percent, automatically raising the Euribor and thus the monthly installments of all those who have loans linked to the euro.

At the same time, the National Bank of Serbia also raised its reference interest rate, as many as 12 times in the last year – from one to 5.75 percent, putting bank clients with debts in dinars in the same situation,” Demostat reminded.

As pointed out, while this increase in interest rates harmed debtors, it should have benefited savers, but Demostat’s analysis shows that, although banks also raised interest rates on deposits, they were less up-to-date than when interest rates on loans should have been raised.

“According to data from the National Bank of Serbia, in January of this year banks paid an average of 3.08 percent interest on all existing deposits of citizens and businesses, which is 1.92 percentage points more than a year ago.

At the same time, banks started charging 2.40 percentage points more for existing loans, raising the average interest rate from 4.34 to 6.74 percent,” says Demostat.

From last January to this January, interest on existing deposits of citizens increased by only 0.86 percentage points on average, and for business deposits by as much as 3.21 percentage points.

Interest rates for new interest deposits increased by 1.82 percentage points for the population, and almost twice as much – by 3.51 percentage points for the economy, according to the survey.

Demostat adds that in the case of existing loans, “the economy has even fared worse than the citizens, because now it pays 2.56 percentage points higher interest than a year ago, and the citizens 2.19”, while the reverse is the case with new loans, since the population has banks raised interest rates by 3.96 percentage points, and the economy by 2.93 percentage points.

Compared to the region, interest rates are generally noticeably higher in Serbia, so in Croatia the interest rates on new deposits in euros are still significantly lower (only 0.15 percent for the population and 1.29 percent for the economy – in Serbia 2.49 and 1 .99 percent), as on existing deposits (0.21 and 0.77 percent – in our case 1.62 and 1.78 percent).

It is similar in Montenegro, where 0.34 and 0.21 percent are given for deposits, and in Macedonia, where it is 0.66 and 0.69 percent.

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