“Serbia can achieve economic growth at the level of three to four percent annually in the coming years, and thus could reach the level of economic activity from the time of the former Yugoslavia, in 1989, in the next few years”, economist Petar Djukic tells FoNet.
He says it is possible that some large investments will drive economic growth in the coming period. However, experience from previous investment cycles shows that such investments generally failed to start small investments. Djukic points out that we cannot get results overnight.
We do not have a proper environment, we do not have structural changes, we do not have reformed public companies, we have high public spending and huge corruption, and we have a situation indicated by the Fiscal Council that our economic growth is lagging behind our development potentials, which would be somewhere around 5 to 5,5 percent, and now we have growth that is about two percent smaller.
“Provided that there is no global crisis, and global growth is kept at around three percent, we have the prospect of growing at a rate of between three and four percent”, Djukic said, recalling that since the time of fiscal consolidation, that is, in 2015, it has an average economic growth of about 2.5 percent annually.
Djukic points out that with such growth rates, Serbia can, in the next few years, reach that level of economic activity from the time of the former Yugoslavia, that is, in 1989, and in terms of the standard it is below that time, but also that of the 2008 standard the then salary of 470 euros could be bought by goods worth about 600 euros today.
He pointed out that in the last few years we have a situation where the euro is losing its value against the dinar, so comparisons of GDP and average salaries in euros do not give a realistic picture. Speaking about forecasts that Serbia could, under certain conditions, reach economic growth of seven percent a year, Djukic points out that there have been times when growth rates were significantly higher than 3 percent a year.
“Growth rates of six to seven percent are reserved for India today, not even China anymore. There are no such high growth rates in the world anymore. All projections by international institutions, such as the IMF and the World Bank, say such rates cannot be achieved anywhere“, Djukic said.
However, he stresses that such growth can sometimes happen, but only in the short term.
“We had such a case in the 1950s, after the war, when it was a very low base, and when we had growth rates of 7-10 percent over a period of ten years. Those are long gone times. We are not at such a low level now, nor are we such an economic attraction as we were at that time”, Djukic said for FoNet.
