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Danilo Savic, CEO of Data Cloud Technology

Leading the Digital Revolution

Despite having been established only four years ago, the Government Data Centre represents the infrastructural cornerstone of Serbia’s digitalisation strategy, and recent accolades confirm...

Roman Kratochvil, CE Industries Managing Partner, Beohemija CEO

Three Decades of Growth and Success

Our focus in 2025 will be on innovation, sustainability and optimising production processes, which will fortify Beohemija’s position as a key regional player, says...

Andrijana Đorđević, Centrosinergija General Manager

Focusing on Clients and Processes Leads to Success

As one of the leading distribution companies in Serbia, Centrosinergija achieves excellence through a focus on clients and responsible processes. By emphasising innovation, automation...

CPI Property Group (CPIPG)

STOP SHOP The Place for Shopping, Gathering and Entertainment

As a longstanding investor in the Serbian market, CPI Property Group invests in projects that not only contribute to the development of local communities,...

Scordia International Properties

A Smart Investment in Tradition: Ethno Household as a Business Opportunity for the Future

In a world where financial stability is increasingly challenging, real estate remains one of the most reliable investments. Unlike stocks, bonds, or cryptocurrencies, which...

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.

Comment

From Angela To Donald

EU enlargement has been treated as an important security matter since the outbreak of the war in Ukraine, providing more encouragement to candidate countries...

Aleksandar R. Miletić, Research Associate of the Institute for Recent History of Serbia; Executive Director of the Centre for History Studies and Dialogue

Trump’s Troublesome Decisions for a Troubled World

If Trump’s election promises are realised, the global landscape could shift dramatically, with potential economic strain on the EU and increased refugee flows During his...

Duško Lopandić, Ph.D diplomat and president of the European Movement in Serbia’s Forum for International Relations

What Awaits Europe?

The European Union appears to lack the required unity and preparedness to adapt to new global challenges. Will it continue to wait for U.S....

Ivan Vejvoda, political scientist

Institutions and Their Would-be Destroyers and Defenders

The malevolent nature of Trump’s intentions isn’t disputed; the question is whether American democracy has strong enough safeguards to contain those intentions Donald Trump’s more...

Giaufret and Konrad Visit Serbia’s First EPS Wind Farm

European Union and German ambassadors, Emanuele Giaufret and Anke Konrad, visited the construction site of the Kostolac wind farm alongside...

EIB Appoints Damien Sorrell as New Head of Regional Hub for the Western Balkans

The European Investment Bank (EIB Global) has appointed Damien Sorrell as the new Head of the Regional Hub for...

Kovačica Naive Art Added to UNESCO Intangible Cultural Heritage List

Kovačica naive art, an element of Serbia's intangible cultural heritage, has been inscribed on the UNESCO Representative List of...

Belgrade Science Festival to Inspire Innovation and Curiosity

The Science Festival, the region’s largest event dedicated to science, will be held from December 12th to 14th, 2024,...

JBAS Receives Prestigious Japanese Foreign Affairs Award at Annual Gala

In a momentous celebration the Japanese Business Alliance in Serbia (JBAS) was honored with the esteemed Minister for Foreign...

EIB Appoints Damien Sorrell as New Head of Regional Hub for the Western Balkans

The European Investment Bank (EIB Global) has appointed Damien Sorrell as the new Head of the Regional Hub for...

Oxford Announces Word of the Year for 2024

After more than 37,000 votes, public discussions around the globe, and linguistic data analysis, Oxford has declared "brain rot"...

The Ritz-Carlton to Redefine Luxury in Belgrade

Belgrade is set to welcome one of the world’s most prestigious luxury hotel brands, The Ritz-Carlton, following the signing...

Robert Fico: Slovakia Will Never Betray Serbia on the Kosovo Issue

Slovakia and Serbia can rely on each other, and Slovakia respects Serbia’s territorial integrity and will never betray Serbia...

MFIC Highlights Modest Gains in Montenegro’s Business Climate with 2024 Recommendations

The Montenegrin Foreign Investors Council (MFIC) has released its White Book - Investment Climate in Montenegro 2024, highlighting a...

EIB Appoints Damien Sorrell as New Head of Regional Hub for the Western Balkans

The European Investment Bank (EIB Global) has appointed Damien Sorrell as the new Head of the Regional Hub for...

Oxford Announces Word of the Year for 2024

After more than 37,000 votes, public discussions around the globe, and linguistic data analysis, Oxford has declared "brain rot"...

The Ritz-Carlton to Redefine Luxury in Belgrade

Belgrade is set to welcome one of the world’s most prestigious luxury hotel brands, The Ritz-Carlton, following the signing...

Robert Fico: Slovakia Will Never Betray Serbia on the Kosovo Issue

Slovakia and Serbia can rely on each other, and Slovakia respects Serbia’s territorial integrity and will never betray Serbia...

MFIC Highlights Modest Gains in Montenegro’s Business Climate with 2024 Recommendations

The Montenegrin Foreign Investors Council (MFIC) has released its White Book - Investment Climate in Montenegro 2024, highlighting a...
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