In the economic world, the measures taken by the Government to support the economy are still being analyzed, and much of the money that goes to these purposes will need to be secured by Serbia – hence borrowing in both domestic and foreign financial markets. Although economic experts generally rate the measures positively, criticism is received due to insufficient support for the agricultural sector.
Three billion euros – if your first association when you hear this figure is that it is a lot of money, you should know that it is the amount that the Government of Serbia will borrow to reduce the negative economic consequences caused by the coronavirus pandemic. The government plans to take three billion euros in the short term, and the debts will be paid back in the long run, from the money of all taxpayers, that is, the citizens of Serbia.
While cautiously analyzing the moves the government is pulling in the current crisis, economic experts say “strong borrowing” is necessary to preserve jobs and avoid enormous damage to the economy. According to the Government, banks will also play an important role, since the Government Decree approved a guarantee scheme worth about two billion euros, which stipulates that businessmen will be able to take out loans, which the state will guarantee as well.
“From a budget standpoint, this is a great measure, from an economic standpoint it is also a good measure, the only question is whether it will be the smallest businesses, those micro-firms that do not own assets – they will have nothing to pledge for a loan, so the question is that for now it seems that there are not many layoffs, but – it seems – that a large group of people has fallen out of focus, and these are people hired illegally, the so-called informal economy, which has about 500,000 people.
“According to the Labor Force Survey, those who are part-time and whose contracts have expired are now in crisis. They are not covered by these measures…,” said the Economy Journalist Milos Obradovic from Danas.
The question is how much money has been found in the whole package to support agriculture? It has been announced that 21.6 million euros through the Agrarian Payments Administration will be earmarked for farmers, but is that enough? What will be the consequences of the coronavirus crisis for the agricultural sector?
“Most of the small and medium-sized agricultural holdings that dominate will not receive these funds because they neither keep the books nor have their own businesses, in my opinion they are the most vulnerable this time. I think it would be much more effective if the direct payments amounting to one at a time hectare of 40 euros, to increase it at least to the amount of another 40 or 50 euros per hectare, would then cover a much larger number of farms and then the effect of supporting agriculture would be much greater,” says agroeconomic analyst Milan Prostran.
The most criticism of economic experts in recent weeks has been addressed to the Government for the idea of paying one hundred euros to citizens after the state of emergency is over. The government is not paying attention to the criticism, and the minister in charge of finance, Sinisa Mali, says the measure has “absolute economic justification”. The calculation shows: 600 million euros will cost the budget such a decision.
The whole world is heading towards a crisis, which the International Monetary Fund says has no vision so far. Their predictions are that the global economy will fall by three percent. For Central and Eastern European countries, they predict a fall in GDP of about 5 percent, and specifically for Serbia – a GDP decline of about 3 percent. Things in the economic world, according to the IMF, and that is true for all, will not go back to the old one before 2022, N1 reports.
