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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...

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.

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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