The new wave of bad economic news from some European countries and the United States over the last few months has stoked anxiety in Serbia, whose people are already grappling with a painful combination of lower wages and higher prices. Between 2009 and early 2011, salaries in Serbia’s public sector remained frozen, while in the private sector they fell by about 10%.
During the same time, the price of central heating in Belgrade rose by 30%, while groceries and commodities have also become more expensive.
The Consumers’ Association of Serbia warns that living standards in the country are increasingly low, with monthly incomes less and less able to cover the cost of the average consumer basket.
“Growing inflation, coupled with the reduction of employee numbers and average salaries, makes the situation even worse,” a member of the Association’s steering committee, Branislava Dejanovic, told SETimes. Consumers in neighbouring countries, she added, enjoy lower prices and tend to make more money.
“An expensive state, the still predominant monopolistic behaviour, inconsistency in the implementation of regulations, and slow changes in market relations” all contribute to the economic morass, she said, citing also a lack of competitiveness on the part of Serbian business.
“Although there are retail chains on the Serbian market, there are none that would fuel competition with their strength and cheap brands,” Dejanovic said. Not all the news is gloomy. According to the National Bank of Serbia, the economy strengthened between January and June of this year, in comparison with the same period during 2010, and exports rose. Estimates suggest Serbia will register 3% GNP growth by the end of the year.
According to official data, inflation in Serbia in July was 12.1% and is expected to decline in the coming months. The National Bank officials hope it will reach single digits by the end of the year, or even drop in half from the current percentage.
Economic analyst Miroslav Zdravkovic is not impressed, however. The current economic indicators and forecasts are simply not very encouraging, he told SETimes.
“The price decrease forecast will result in a decline of overall economic production; this not just in Serbia, but for the economies of developed Western countries and the entire Balkan region. The situation since late 2008, when the global economic crisis struck the world, is now repeating itself,” Zdravkovic said.
Public spending is largely controlled by the IMF, meaning there will be no room for excessive spending in the coming period, rather only for saving.
Zdravkovic says that not even the general election in the first half of 2012 and the preceding campaign will not allow the state to spend too much money. “There will be no room for major election campaign funding,” he said.
Source setimes.com
