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Milan Marković, General Manager, Smurfit Kappa Belgrade

Returning Treated Water to the Danube

Here Milan Marković, General Manager of Smurfit Kappa Belgrade, shares his insights about the company’s legacy and innovative strides in environmental protection Founded in 1921...

Bogdan Gavrilović, Managing Director, WTO Serbia

Transport and Logistics Without Borders

World Transport Overseas is one of the fastest-growing logistics companies in Eastern Europe, with branches in Bulgaria, China, Croatia, Greece, Kosovo, North Macedonia, Serbia,...

Vesna Jovanović, Director, EurologSystem

Connecting Italy and Serbia by Rail

EurologSystem, which is set to commemorate two decades of successful operations in 2025, transports an average of 500,000 tons of goods annually, primarily agricultural...

Branko Milikić, Business Development Director at Halcom Serbia

Innovations in Digital Banking

Halcom is a leader in the domain of digital banking and banking solutions. This company has spent 30 years enabling the safe and efficient...

Dragana Ašić Ratkovac, Business Manager Consulting & Tax Advisor at Unija Consulting d.o.o. Beograd

Our View of the Tax World and What’s Important

The success of companies in today’s world depends, among other things, on the ability to adapt to constant amendments to tax laws. My experience...

Nebojša Savić Ph.D., Professor Of Economics And Competitiveness At The Singidunum University Faculty Of Economics, Finance And Administration (FEFA)

The Dragon Of Inflation Was Lurking Around The Corner

Unlike some previous inflationary waves, the current inflation occurred under the strong influence of problems on the supply side. This huge pressure on costs found fertile ground in the most developed economies, into which massive amounts of money had already been pumped

The phenomenon of inflation has returned to the world’s economy after a break of almost half a century. It hit the world economy at the global level in 2021, and is linked to both the covid-19 pandemic and unresolved issues that have persisted since the global financial crisis of 2008. The struggle against the crisis was focused on the stabilising of the financial system and inflation was low. The struggle to overcome the crisis boiled down to pumping in large amounts of money. The global financial system survived that crisis, but debts grew, and the dragon of inflation was lurking around the corner. In contrast to the previous major inflationary wave, which hit the U.S. in the 1960s and ‘70s (known as The Great Inflation), today’s inflation is of a different character.

Inflation can take three forms: cost inflation, demand inflation and structural inflation. The Great Inflation of the ‘60s and ‘70s, with the abandoning of the Bretton Woods agreement, and alongside the energy crisis, was primarily a case of demand inflation, with elements of cost inflation.

The current inflation under covid-19 differs completely from the aforementioned inflation, because it emerged under the strong influence of supply-side problems due to the pandemic disrupting supply chains. With the gradual re-opening during 2021, shortages of numerous inputs and energy sources occurred, which caused a sharp rise in prices, of everything from microchips for cars and electronics to energy sources. This huge pressure on costs found fertile ground in the most developed economies, into which huge amounts of money have already been pumped continuously since the crisis of 2008, and particularly during the pandemic of 2020 and 2021.

The leading central banks still aren’t seeking to raise interest rates, with the exception of the Bank Of England, as they don’t want to slow down growth in the process of recovering from 2021’s gdp falls

This all led to inflation rising in the most developed economies, which was unthinkable during the last half a century and which start from around 7%, for example in the United States and Germany, and which have an upward trajectory. Meanwhile, the leading central banks still aren’t seeking to raise interest rates, with the exception of the Bank of England, because they don’t want to slow down growth in the process of recovering from the falling GDP experienced during 2021.

Serbia’s inflation rate in 2021 was 7.9%, expressed in year-on-year terms, and 4.0% as an annual average rate. Three-quarters of this hike in prices relates to food and energy prices. The high year-on-year growth in food prices is a consequence of several factors: rising food prices worldwide, drought and higher production costs, as well as these prices being extremely low in 2020, due to falling demand. Inflation in Serbia has a high external component. As year-on-year core inflation stood at 3.5%, thanks to a stable exchange rate, and as inflation expectations are anchored at around 3%, inflation can be expected to most likely continue to fluctuate at around the level from December 2021 during the first quarter of this year, while a gradual decline is expected from the second quarter, with a return to the targeted limits during the third quarter of 2022.

By Emmanuel B. Nyirinkindi, IFC's Vice President of Cross-Cutting Solutions

Public-Private Partnerships Key to Serbia’s Green Future

Five years ago, dark, polluted water with a foul smell trickled down from the Vinča landfill, sending toxic pollutants into the Danube. The landfill,...

Comment by Zoran Panovic

Growth Plan

Late April saw the European Parliament give the green light to the Growth Plan for the Western Balkans, with the Council of the European...

Dr Aleksandar Mitić, Institute for International Politics and Economy

Cooperation with China Raised to the Highest Level in Europe

Both Germany and France desire close cooperation with China, so any criticism of Serbia’s close relations with China is an example of double standards I...

Slobodan Zečević Ph.D, Institute for European Studies

Delicate Seesaw

France and Germany have contrasting views on cooperation with China, but the internal reasons for such views don’t automatically relate to their stance regarding...

Mickoski Proposes New Government for North Macedonia

Hristijan Mickoski, leader of VMRO-DPMNE and the designated Prime Minister of North Macedonia, has formally submitted his proposed cabinet...

King Frederick X Inaugurates First Section of Undersea Tunnel Connecting Denmark and Germany

King Frederick X of Denmark has inaugurated the first segment of the ambitious 18-kilometre Fehmarn Belt tunnel beneath the...

Belgrade Hotel Union Sold for €6.2 Million

Hotel Union, a historic landmark in Belgrade, has been sold for 727 million dinars (€6.2 million) at a public...

French Firms Suez and Vinci to Oversee Wastewater Treatment in Belgrade

The Serbian government has enlisted French companies Suez International SAS and Vinci Construction Grands Projets for the design, construction,...

Dušan Živković Named New CEO of Elektroprivreda Srbije

Elektroprivreda Srbije (EPS) has announced the appointment of Dušan Živković as its new Chief Executive Officer, following a decision...

Mickoski Proposes New Government for North Macedonia

Hristijan Mickoski, leader of VMRO-DPMNE and the designated Prime Minister of North Macedonia, has formally submitted his proposed cabinet...

King Frederick X Inaugurates First Section of Undersea Tunnel Connecting Denmark and Germany

King Frederick X of Denmark has inaugurated the first segment of the ambitious 18-kilometre Fehmarn Belt tunnel beneath the...

Belgrade Hotel Union Sold for €6.2 Million

Hotel Union, a historic landmark in Belgrade, has been sold for 727 million dinars (€6.2 million) at a public...

Public-Private Partnerships Key to Serbia’s Green Future

Five years ago, dark, polluted water with a foul smell trickled down from the Vinča landfill, sending toxic pollutants...

German Voters Dominate, Malta Least Represented in Upcoming European Parliament Elections

As the 2024 European Parliament elections draw near, set to take place from 6 to 9 June, Eurostat has...

Mickoski Proposes New Government for North Macedonia

Hristijan Mickoski, leader of VMRO-DPMNE and the designated Prime Minister of North Macedonia, has formally submitted his proposed cabinet...

King Frederick X Inaugurates First Section of Undersea Tunnel Connecting Denmark and Germany

King Frederick X of Denmark has inaugurated the first segment of the ambitious 18-kilometre Fehmarn Belt tunnel beneath the...

Belgrade Hotel Union Sold for €6.2 Million

Hotel Union, a historic landmark in Belgrade, has been sold for 727 million dinars (€6.2 million) at a public...

Public-Private Partnerships Key to Serbia’s Green Future

Five years ago, dark, polluted water with a foul smell trickled down from the Vinča landfill, sending toxic pollutants...

German Voters Dominate, Malta Least Represented in Upcoming European Parliament Elections

As the 2024 European Parliament elections draw near, set to take place from 6 to 9 June, Eurostat has...
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