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Prof. Dr. Ioanna Batsialou, Director and Owner of Ioanna Regen Polyclinic

Sun YES, Ageing NO

Despite the common belief that medical aesthetic treatments are only performed in winter, our need for care is much greater during the summer, says...

Peter Novak, Managing Director at Kolektor Etra

Transformers for the Most Demanding Consumers

Ljubljana-based Kolektor Etra has a tradition of producing power transformers that dates back over 90 years. It is present with its products in more...

Danijela Bojović, Project and Real Estate Manager, Napred

Napred: Synonymous with Progress

Over the past 75 years, Belgrade-based company Napred has established a formidable presence in 10 countries across three continents. This company has consistently emerged...

Djordje Djokic, Senior Partner, Djokic + Partners

Building a Brand Through Quality

Djokic + Partners is considered one of the top law firms in the banking and financial sectors due to its profound understanding of business...

Wolt

Wolt is Transforming the Delivery Industry

Speed, sustainability and growth are supported by technological innovations This headline recently emerged from a Bloomberg interview with Matko Katanec, Wolt Regional Director for CEE...

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

From Lavrov to Macron

Despite the Serbian Progressive Party (SNS) having signed a Cooperation Agreement with Putin’s United Russia, and despite SNS President and Serbian PM Miloš Vučević...

Goran Radosavljević, Ph.D. Vice Dean and Director of the FEFA Institute

We Need to Quadruple Our Growth Rate

Reducing corruption, reforming the energy sector and fundamentally changing the secondary education system are the keys to faster economic growth It was two months ago...

Luka Baturan, University of Novi Sad Faculty of Law

Arbitrary Tax Breaks Degrade the System

The biggest job that Serbia has to do – and it pertains to tax regulations – is to radically reform personal income tax and...

Nebojša Bjelotomić, Director of the Digital Serbia Initiative

Instead of Walls and Machines, We’re Investing in People and Their Knowhow

For countries with a falling population, it is recommended that all remaining workers “climb” the ladder of industrial worth. However, this means dealing far...

Andrej Plenković Re-Elected as HDZ Leader with Overwhelming Majority

Andrej Plenković has secured another term as the leader of the Croatian Democratic Union (HDZ), winning 84,786 votes in...

Serbia and Egypt Sign Landmark Free Trade Agreement

In a significant move to bolster economic ties, Serbia and Egypt have signed a Free Trade Agreement along with...

United States Adds $18 Million In New Funds To Development Partnership With Serbia

Today, the United States Government, through the United States Agency for International Development (USAID), announced an additional $18 million...

Montenegro Nominated for Europe’s Most Desirable Destination Award

Montenegro has been nominated for the prestigious title of Europe's most desirable destination in the Wanderlust Reader Travel Awards...

Serbia Signs Memorandum on Nuclear Energy Development

In a significant move towards modernizing its energy sector, the Serbian government, along with twenty scientific and academic institutions,...

Andrej Plenković Re-Elected as HDZ Leader with Overwhelming Majority

Andrej Plenković has secured another term as the leader of the Croatian Democratic Union (HDZ), winning 84,786 votes in...

Serbia and Egypt Sign Landmark Free Trade Agreement

In a significant move to bolster economic ties, Serbia and Egypt have signed a Free Trade Agreement along with...

United States Adds $18 Million In New Funds To Development Partnership With Serbia

Today, the United States Government, through the United States Agency for International Development (USAID), announced an additional $18 million...

Montenegro Nominated for Europe’s Most Desirable Destination Award

Montenegro has been nominated for the prestigious title of Europe's most desirable destination in the Wanderlust Reader Travel Awards...

The International “Aleksandar Tišma” Literary Award ceremoniously presented to French writer Cécile Wajsbrot

The third International “Aleksandar Tišma” Literary Award was ceremoniously presented to French writer Cécile Wajsbrot on June 24, 2024,...

Andrej Plenković Re-Elected as HDZ Leader with Overwhelming Majority

Andrej Plenković has secured another term as the leader of the Croatian Democratic Union (HDZ), winning 84,786 votes in...

Serbia and Egypt Sign Landmark Free Trade Agreement

In a significant move to bolster economic ties, Serbia and Egypt have signed a Free Trade Agreement along with...

United States Adds $18 Million In New Funds To Development Partnership With Serbia

Today, the United States Government, through the United States Agency for International Development (USAID), announced an additional $18 million...

Montenegro Nominated for Europe’s Most Desirable Destination Award

Montenegro has been nominated for the prestigious title of Europe's most desirable destination in the Wanderlust Reader Travel Awards...

The International “Aleksandar Tišma” Literary Award ceremoniously presented to French writer Cécile Wajsbrot

The third International “Aleksandar Tišma” Literary Award was ceremoniously presented to French writer Cécile Wajsbrot on June 24, 2024,...
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