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Simon Taylor, HYCU, Inc. CEO

Providing Easy Ways To Protect Data

HYCU is a multinational company with offices around the world, but much of its European operation is located right here in Belgrade, an important...

Luštica Bay

Authentic Adriatic In Luštica Bay A Place To Belong

Authentic residences, The Chedi five-star hotel, beautiful beaches with a crystal blue sea, a unique gastronomic and shopping experience and an intense calendar of...

Vladimir Živanović, Director Of The Zlatibor Tourism Organisation

Foreigners Also Flock To Zlatibor

It is thanks to magical nature and the air spa status that Zlatibor has enjoyed for 129 years, coupled with major investments, excellent infrastructure...

Porto Montenegro

The Adventure Continues On The Adriatic

Summer is in full swing at Porto Montenegro, with yachts lining the marina, a range of new and well-loved shops and restaurants in the...

Bogdan Gavrilović, Sales Manager, World Transport Overseas (WTO)

Expanding Operations

World Transport Overseas (WTO), which is headquartered in Eastern Europe and has branches in Bulgaria, China, Croatia, Greece, North Macedonia, Serbia and Slovenia, was...

Jurij Bajec Ph.D., Special Advisor At The Economics Institute And Full Professor At The University Of Belgrade Faculty Of Economics

Open Balkan Is A Good Initiative

During times of great uncertainty and deeply disrupted international economic and political relations, Serbia should seek additional forms of economic connection that complement its strategic commitment to EU membership

Independently of the various scenarios of future relations with Russia, Serbia is already enduring the negative consequences of the Russian-Ukrainian conflict that are spilling over onto the Serbian economy.

Firstly, the Serbian economy is strongly integrated into the EU according to all economic parameters. The EU contributes over 60% to Serbia’s total foreign trade exchange and accounts for 70% of foreign direct investment, with EU partners operating around 24,000 companies in the country, employing close to 900,000 workers, while the largest part of the remittances of Serbian citizens – equating to approximately 8% of GDP – arrive from Germany and other European countries. The Serbian banking sector is also dominated by European-owned banks, while the Serbian dinar is pegged to the euro. The strong, longterm connection between the two economies has been established empirically: when the EU advances well in economic terms, that reflects positively on Serbia’s economic growth, employment and the standard of living of Serbian citizens. The opposite situation, however, also applies, which is precisely the case now.

Disrupted global supply chains, coupled with dramatic rises in energy and food prices, lead to a slowdown in investment activity and economic growth, pushing inflation and exerting pressure on the budgets of European countries. All these negative effects partly spill over to hit the Serbian economy. FDI inflows are already lower this year, the foreign trade deficit is increasing, inflation has exceeded 10%, alongside a pronounced increase in prices of food and energy, while interest rates on loans to businesses and households have increased. It is this year necessary to allocate a huge 1.7% of GDP to cover the interest on public debt repayment, while the cost of future borrowing on financial markets remains uncertain.

An important priority for the future government should be mitigating the ramifications of the energy crisis caused by the Russian-Ukrainian conflict, but also by the unprofessional managing of the domestic energy sector

That’s why it’s important, during such times of great uncertainty and deeply disrupted international economic and political relations, for Serbia to seek additional forms of economic connection that complement its strategic commitment to EU membership. One such form is the regional Open Balkan initiative, which – with its basic guiding idea of the free flow of goods, services, labour, capital and technology – strengthens all participating countries and increases their competitiveness internationally.

The future government’s second priority should be mitigating the ramifications of the energy crisis caused by the Russian- Ukrainian conflict, but also by the unprofessional managing of the domestic energy sector. The unacceptably poor management of the largest thermal power plant, which under normal conditions produces 40% of all electricity for domestic needs and export, has led to the need to make intervention imports at extremely high prices and unnecessarily spend hundreds of millions of euros that will ultimately be paid by Serbian citizens. Around two years and significant investments will be need to stabilise the situation. When it comes to gas prices, Serbia has a favourable three-year arrangement on the import of Russian gas, but that only covers three-quarters of the required amount, with the remainder needing to be paid at higher, market, prices. However, here again Serbia has unnecessarily aggravated the situation by failing to ensure the timely expansion of its own gas storage capacities, which forced it to secure the required quantities, at an additional cost, from Hungarian storage facilities. Finally, Serbia covers about 75% of its oil needs from imports, the main problem of which – at least for now – is represented by very high prices.

Considering that such unfavourable situations cannot change quickly, the Government must – at least temporarily – ease the operations of businesses and protect the living standard of citizens through tax breaks and controlling the prices of key energy sources, while simultaneously extending its interventions from commodity reserves and controlling prices of basic foodstuffs.

Comment by Zoran Panović

Favourite Enemies

Of course, there has been no occurrence of the most normal possible thing for fixing relations, which would be for Serbian and Croatian presidents...

Aleksandar Radić, Military Analyst

Rearming Is A Long Process

It is obvious that we will see the re-forming of many of the battalions that were disbanded over the last couple of decades, when...

Marija Ignjatijević, Researcher, Belgrade Centre For Security Policy

The EU (Still) Lacks Sufficient Might To Form Autonomous Defence Capacities

The very fact that the EU repurposed its peace facility instrument to arm Ukraine has significant operative relevance, but also symbolic relevance. Member states...

Nikola Lunić, Executive Director Of The Council For Strategic Policy

Time To Create Dependable Alliances

Under the conditions of a taxing history and unstable relations, the Western Balkan region could easily become an instrument of major powers in the...

Ivana Vuleta Is The Champion Of Europe

Ivana Vuleta became the European champion in the long jump at the Old Continent Championships in Munich, with her...

Ambassador Chen Bo: China Aims For Improvement Of Bilateral Cooperation With Serbia

Ambassador of China to Serbia H.E. Chen Bo, in the conversation with the President of Serbia Aleksandar Vučić, emhasized...

Real Estate Market In Serbia Worth Two Billion Euros

This year, real estate turnover increased by one percent compared to 2021, and the total value of transactions in...

Gas Prices In Europe Rise To More Than $2,450 Per Thousand Cubic Meters

The price of gas in Europe rose above $2,450 per 1,000 cubic meters for the first time since 8...

EU: Borrell And Lajcak Tomorrow In Brussels With Vučić And Kurti

The European External Action Service (EEAS) announced that a meeting will be held in Brussels on Thursday as part...

Ivana Vuleta Is The Champion Of Europe

Ivana Vuleta became the European champion in the long jump at the Old Continent Championships in Munich, with her...

Ambassador Chen Bo: China Aims For Improvement Of Bilateral Cooperation With Serbia

Ambassador of China to Serbia H.E. Chen Bo, in the conversation with the President of Serbia Aleksandar Vučić, emhasized...

Real Estate Market In Serbia Worth Two Billion Euros

This year, real estate turnover increased by one percent compared to 2021, and the total value of transactions in...

Gas Prices In Europe Rise To More Than $2,450 Per Thousand Cubic Meters

The price of gas in Europe rose above $2,450 per 1,000 cubic meters for the first time since 8...

EU: Borrell And Lajcak Tomorrow In Brussels With Vučić And Kurti

The European External Action Service (EEAS) announced that a meeting will be held in Brussels on Thursday as part...

Ivana Vuleta Is The Champion Of Europe

Ivana Vuleta became the European champion in the long jump at the Old Continent Championships in Munich, with her...

Ambassador Chen Bo: China Aims For Improvement Of Bilateral Cooperation With Serbia

Ambassador of China to Serbia H.E. Chen Bo, in the conversation with the President of Serbia Aleksandar Vučić, emhasized...

Real Estate Market In Serbia Worth Two Billion Euros

This year, real estate turnover increased by one percent compared to 2021, and the total value of transactions in...

Gas Prices In Europe Rise To More Than $2,450 Per Thousand Cubic Meters

The price of gas in Europe rose above $2,450 per 1,000 cubic meters for the first time since 8...

EU: Borrell And Lajcak Tomorrow In Brussels With Vučić And Kurti

The European External Action Service (EEAS) announced that a meeting will be held in Brussels on Thursday as part...
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