Sitemap

Nebojša Nikolić, Director In Risk Advisory, Deloitte Serbia

Inflation Is The Biggest Challenge

The outbreak of the pandemic led to uncertainty becoming a new reality, after which the world entered a period of even more pronounced uncertainty due to the war in Ukraine, which came on a wave of inflation that was already growing rapidly. This, unfortunately, will have a negative impact on the financial sector, which is always inextricably linked to challenges

It is common knowledge that investments should always be coordinated with risk aversion, desired returns, macroeconomic expectations and the planned investment horizon. We spoke to Nebojša Nikolić, risk advisory director at Deloitte, to find out how all this is achieved today.

We’re living in turbulent times. How is the financial sector being impacted by the pandemic and the war in Ukraine?

– The financial sector is always inextricably linked to the challenges confronting the economy and the population.

Multinational companies that have their operations and part of their revenue linked to Russia and Ukraine need to make up for unexpected losses, while alongside that it is also necessary to harmonise their operations with the new lists of sanctions against Russia. New ways of reaching fresh sources of income will be sought, which won’t be an easy mission, given that demanding regulations and the banking system’s inertness are causing certain delays in the implementation of digital agendas.

Some groups will utilise the market turmoil and there will probably be further consolidate of the banking sector, and perhaps also withdrawals from the market. Rising inflation will be the main driver of further uncertainty. There’s likely to be a nominal increase of income in banks’ balance sheets, due to rising interest rates as a result of inflation. Such a situation could also impact on the expenditure side of the balance sheet through an increase in loan-loss provisions and growth in NPLs as a consequence of increased credit risk.

We all know what’s brought by this process and the fight against inflation: rising prices, higher unemployment, increased credit risk, entry into a recession

According to Serbia’s central bank, the National Bank of Serbia (NBS), the country should maintain strong, sustainable and diversified growth. Do you share that optimism?

– The road to realising these optimistic forecasts will be filled with challenges. Let’s take, for example, the fact that mutual incompatibility exists at the level of the EU and the U.S. related to the causes and impact of inflation. Let’s also take, for example, the unusual statement of European Central Bank President Christine Lagarde, who characterised rising inflation on these two continents as “a completely different beast”. This raises an additional question regarding the effective and efficient fight against inflation, as well as a question over the appropriate levers of fiscal and monetary policy that should be applied to curb inflation.

The absence of a unified stance on inflation at the global level leads to suspicions that the fight against inflation will be neither easy nor short. We all know what’s brought by this process and the fight against inflation: rising prices, higher unemployment, increased credit risk, entry into a recession.

Which areas now have the greatest investment potential and the least risk?

– As a result of increased market uncertainty, due to the war, inflationary pressures, the recurrence of the virus and Covid-19 lockdowns in China, investors at the global level are running to some safer and traditional “tangible” forms of investment: in gold, other precious metals and real estate.

We are currently seeing on the market, both around the world and on our market, an increase in the value of these investment categories, while declines are being recorded on the stock market and the cryptocurrency market. Still, exaggerated demand and the excessive influence of investors in the aforementioned investment categories can create price bubbles, which are usually followed by “bursting”, i.e., a price inversion and the return to long term price averages.

Tadeu Marroco – BAT Chief Executive Officer

BAT’s Growing Success in Serbia: The Future Lies in Smokeless Products

Tadeu Marroco has been BAT’s Chief Executive since May 2023, following his role as Finance Director from 2019. Since joining BAT in 1992, he...

Emil Sovilj CEO, Energotehna d.o.o.

Building the Energy of the Future

“I believe that by consolidating the capital of domestic, smaller yet reputable companies, we could once again establish a strong reputation as reliable builders,...

Stanislava Petković, General Director of Vista Rica

A Pioneer in Opening New Investment Opportunities for the Economy

The investment market in Serbia is undergoing a transformation, with alternative investment funds attracting increasing attention from domestic investors In this interview for CorD, Stanislava...

Miloš Jauković, CEO, Dr. Max Serbia

Making Healthcare Accessible to All

Dr. Max Group and Dr. Max Serbia are leaders in providing comprehensive and timely services to patients, with highly ambitious plans for the company’s...

Electric Cars Surge in Europe

The first quarter of 2025 has brought mixed fortunes for the European automotive industry. While overall car sales across the...

Direct Flights Between Belgrade and Geneva

In a move set to bolster its European network, Air Serbia has announced the launch of direct flights between...

Sørensen’s Visit to Belgrade Highlights Need for Implementation of Dialogue Agreements

Peter Sørensen, the European Union’s Special Representative for the Belgrade–Pristina Dialogue,recently paid a working visit to Belgrade as part...

Klaus Schwab Steps Down Amid Allegations

After more than five decades at the helm of the World Economic Forum, Klaus Schwab, the founder who played...

Print Still Reigns in Europe

In an era dominated by screens and streaming, the allure of ink on paper continues to charm European readers. According...