Economics Professor: Serbia’s Average Salary Offers Less Buying Power than 30-40 Years Ago

Market (BETAPHOTO/MILAN TIMOTIC)

Serbia’s inflation rate – which cumulatively amounts to 25 percent in the past two years – is one of the highest in Europe, while the country’s average wage allows consumers to by less than three or four decades ago, Dejan Soskic, a professor of the Belgrade University School of Economics, said on March 5.

The former governor of the National Bank of Serbia told N1 that last year’s inflation was 12.1 percent, while a year before it was 11.9 percent, adding that these figures are four times the inflation goals set by the bank for the last two years.

According to Soskic, Serbia has “one of the highest inflation rates in Europe” as a result of “oversights in monetary policy and an expansive fiscal policy, where salaries are raised to buy popularity, which in turn eats away at real buying power.” “All this talk of salaries growing in terms of number of euros doesn’t mean they are actually bigger. The average salary in Serbia can buy less than 30-40 years ago, which is paradoxical. The situation is far from good,” the economist said, adding that the effects of inflation are especially notable when the exchange rates are fixed.

Soskic went on to say that, in the last twelve years, Serbia has achieved an average economic growth rate of 2.4 percent, which is below the average for central and eastern Europe and less than the global average as well.