European Policy Center: Pandemic Necessities Efficient State Acton to Support Serbian Economy

Virus

Many Serbian companies are already "clinically dead" and can't settle their liabilities. Given that it's the consequence of a natural disaster, namely the coronavirus outbreak, a governmental action is necessary, Marko Obradovic of the European Policy Center said on March 23.

"Superficial, gradual or partial measures will not be sufficient,  and can even be counterproductive," Obradovic said in an article published on the Center's website, "Huston, we have a problem" about the possibility of a Serbian meltdown over the coronavirus outbreak.

Obradovic said that hard-currency reserves were exceptionally high and that Serbia might use "a monetary release" in a series of dinar issues to prevent the collapse of its economy. At the same time, state interventions in the foreign exchange market would make it possible for the state to guarantee the stability of the national currency and eliminate price pressures, Obradovic said.

The expert said that the situation might be very difficult if the state postponed an intervention, lulled into a false feeling of security over increased VAT inflows in March, based on retailers' mega-income as people stocked up on supplies fearing shortages causes by the pandemic.