Sitemap

Iosif Vangelatos, General Manager, Inos Balkan

Proud of Tripling Trade Volume

Inos Balkan already possessed extensive expertise in the recycling sector, with its collection and processing centres, while it has today transformed itself successfully to...

Aris Karousos, CEO of Eko Serbia

Drivers Know Why They Choose Eko

Two decades ago, when this company launched its operations in Serbia, the desire was for the EKO brand to become synonymous with reliability, quality...

Danilo Đurović, General Manager, Autotechnica Serbia – Hertz

Introducing Flex Drive

As part of the Autohellas Group, which has been the absolute leader of Greece’s automotive sector since 1974, Hertz is more than just a...

Nikos Veropoulos, Owner, Veropoulos

Super Vero, Super Successful

For two decades already, company Veropoulos has been known on our market for its unique offer and high-quality products at promotional prices, but also...

Panagiotis Pitsikos, CEO, Autostop Interiors

The Best Is Yet to Come

Company Autostop Interiors was established in 2013 and specialises in manufacturing car floor mats and leather covers. These 10 years have been a journey...

Slaviša Tasić, Professor Of Economics, Researcher

Sobering Up Comes Next

Sobering-up will follow during this year, through a more restrictive monetary policy that will also be transferred to Serbia. That means reduced liquidity, a slower economy, fewer new jobs and rising interest rates. Rising inflation is no longer the main risk – we are awaited by more unpleasantness through the extinguishing of inflation that will follow

We’re accustomed to inflation. The only periods without inflation in the living memory of today’s Serbian citizens were three short periods when the dinar had a fixed exchange rate: the period of the fixed exchange rate of Ante Marković, the period of the fixed exchange rate of Dragoslav Avramović and the last few years, which were again marked by a de facto fixed exchange rate.

We were to blame for all the inflation experienced to date. Prior to 2001, the inflation and hyperinflation that we experienced were created by the state financing itself through the printing of money. In more recent times, inflation was generated by the NBS whenever it lacked the ear to maintain the exchange rate, as this country’s only successful anchor of monetary policy.

However, this current inflation is something we didn’t create ourselves. The dinar is stable against the euro, but that’s no help given that prices are now also rising in the eurozone. The European Central Bank, as well as other key central banks around the world, reacted to the pandemic by turning on the taps and allowing the money to flow. They increased liquidity in order to prevent the economic crisis triggered by the pandemic from deepening.

They succeeded in preventing an even greater crisis, but it seems that they overexaggerated. Monetary policy works with a delay of unknown duration. You print money today, and inflation comes later – but you don’t know precisely when it will come and to what extent. The inflation that we now see in the eurozone – and in zones of dollars, pounds, roubles, Turkish lira and other currencies – is a consequence of the excessive monetary expansion of the previous two years. Serbia, which previously imported price stability through a fixed exchange rate, has now imported inflation through just such an exchange rate against the euro.

Prior to 2001, the inflation and hyperinflation that we experienced were created by the state financing itself through the printing of money. In more recent times, inflation was generated by the NBS whenever it lacked an ear to maintain the exchange rate, as this country’s only successful anchor of monetary policy

The European Central Bank will not allow things to spin out of control. It currently has inflation of close to 5% and its task is to return to the targeted level of 2% annually. If the NBS continues to peg the dinar to the euro, it will continue to import the policy of the European Central Bank. That’s why further inflation flare-ups are unlikely.

However, the problem hasn’t dissipated. On average, companies and countries fared a little better than they’d expected last year. They had higher revenues. That is the early effect of inflation. Like an alcoholic beverage, it initially makes things better.

This year, the sobering-up will follow through a more restrictive monetary policy, which will be transferred to Serbia as well. That means less liquidity, a slower economy, fewer new jobs and rising interest rates. The main risk is no longer rising inflation – more trouble awaits us through the quenching of inflation that follows.

Sobering-up will follow during this year, through a more restrictive monetary policy that will also be transferred to Serbia. That means reduced liquidity, a slower economy, fewer new jobs and rising interest rates. Rising inflation is no longer the main risk – we are awaited by more unpleasantness through the extinguishing of inflation that will follow.

Comment

Census Results Cause Concern

The Ministry of Education claims to be exerting ongoing efforts to reform education, but census results indicate the need for more work. The “Platform...

By Iva Draškić Vićanović Ph.D., Dean of the University of Belgrade Faculty of Philology

Restore Teachers’ Dignity

The proposals presented in our Platform are viable over the short term, require no large and lasting reforms and could lead to major visible...

Comment by Prof. dr Slobodan Zečević

The Mirage of the European Oasis

Serbia officially began EU accession negotiations in January 2014. Over the subsequent decade, 22 of the 35 accession negotiation chapters have been opened and...

Plamena Halacheva, Deputy Head of the Delegation of the European Union to Serbia

Easier Access to the Western Balkans’ Single Market

The EU aims to involve Western Balkans partners with its Member States on equal terms, fostering a reform partnership that’s oriented towards the future...

From the Seized Tobacco, 7 Tons of the Highest Quality Organic Fertilizer Were Obtained

Over 5 tons of illegal cut tobacco, as much as 3.5 tons of leaf tobacco, 26,000 boxes of cigarettes,...

Balkan Borders Blur as Free Labor Movement Pact Launches

Marking a significant shift in the labor markets of Southeast Europe, Serbia, Albania, and North Macedonia have forged an...

Southeast Europe Unites in Support for Ukraine at Tirana Summit

In a striking demonstration of unity from Tirana, Southeast European leaders, together with Ukraine's President Volodymyr Zelenski, have collectively...

Serbia Commits €5.4 Billion to Renewable Energy by 2030

Serbia's state-owned power company, Elektroprivreda Srbije (EPS), has announced an ambitious plan to invest €5.4 billion in renewable energy...

Serbia and Angola Cement Cultural Bonds with New Cooperation Programme

Serbia and Angola have inked a Cultural Cooperation Programme set to span from 2024 to 2026, as announced by...

Balkan Borders Blur as Free Labor Movement Pact Launches

Marking a significant shift in the labor markets of Southeast Europe, Serbia, Albania, and North Macedonia have forged an...

Serbia Commits €5.4 Billion to Renewable Energy by 2030

Serbia's state-owned power company, Elektroprivreda Srbije (EPS), has announced an ambitious plan to invest €5.4 billion in renewable energy...

Serbia and Angola Cement Cultural Bonds with New Cooperation Programme

Serbia and Angola have inked a Cultural Cooperation Programme set to span from 2024 to 2026, as announced by...

Serbia Awards Distinctions to Notable Personalities on National Day

In a ceremonial tribute to Serbia's National Day, President Aleksandar Vučić presented awards to a host of esteemed individuals...

Western Balkans Eye EU Membership by 2028

At the esteemed Munich Security Conference, a cornerstone event in global security discourse, leaders from North Macedonia, Albania, and...

Balkan Borders Blur as Free Labor Movement Pact Launches

Marking a significant shift in the labor markets of Southeast Europe, Serbia, Albania, and North Macedonia have forged an...

Serbia Commits €5.4 Billion to Renewable Energy by 2030

Serbia's state-owned power company, Elektroprivreda Srbije (EPS), has announced an ambitious plan to invest €5.4 billion in renewable energy...

Serbia and Angola Cement Cultural Bonds with New Cooperation Programme

Serbia and Angola have inked a Cultural Cooperation Programme set to span from 2024 to 2026, as announced by...

Serbia Awards Distinctions to Notable Personalities on National Day

In a ceremonial tribute to Serbia's National Day, President Aleksandar Vučić presented awards to a host of esteemed individuals...

Western Balkans Eye EU Membership by 2028

At the esteemed Munich Security Conference, a cornerstone event in global security discourse, leaders from North Macedonia, Albania, and...
spot_img