Photo: PixabayTwo thirds of the amount of inflation in Serbia is the result of the spillover of world energy and food prices to our market, and it can be expected to decrease next year, said the vice-governor of the National Bank of Serbia (NBS), Ana Ivković.
She said on the panel "Is inflation transitory or is it here to stay?" at the 22nd Belgrade Economic Forum that a rapid decline in inflation is expected next year and a return to the expected values in 2024.
She explained that inflation arose before the war in Ukraine, after the pandemic crisis, when there was a sudden increase in demand on the world market, which supply could not keep up with, so there was a problem with supply, and that after that the Ukrainian crisis got even worse.
"Most central banks estimated that the crisis was short-term, but after the start of the war in Ukraine, the crisis became more permanent," said Ivković.
WHAT INFLUENCES THIS RATE OF INFLATION?
She pointed out that the increase in the price of energy and food in the world by 65 to 70 percent affects domestic inflation.
"We do not see inflationary pressures on the demand side, which is due to the reaction through the monetary policy of the NBS, and our market was not overheated and the dinar remained stable even at a time when there was panic in the world in March and April," said Ivković.
Professor Dragan Đuričin estimated that the cause of the crisis lies in the structural imbalance of the model of liberal capitalism that has lasted since the first decades of the last century.
"This led to the disruption of the macroeconomic foundations of the system, which led to a crisis of supply and demand and experimental economic policies and a huge expansion of money emission, which production did not support and there was a mismatch between supply and demand," Đuričin assessed.
"NBS measures produced results, regardless of the fact that they are experimental, which is dangerous, but we were lucky that they produced results." The solution is on the structural side, the situation cannot be resolved with monetary measures," Đuričin warned.
Professor of the Faculty of Economics in Belgrade, Dejan Šoškić, believes that Serbia could have had a lower inflation rate if it had dealt with energy and agriculture in an appropriate manner, which in earlier years were export-oriented, so it would be easier to defend against import inflation, which leads to an increase in energy and food prices. .
Šoškić expressed his opinion that the NBS should have reacted by tightening the monetary policy a year ago, when the first signs of inflation appeared.
"Our base inflation is high, which is a sign that inflation has spilled over into inflationary expectations and now you have the phenomenon that employees expect their wages to rise, so that will further raise prices." This will lead to further tightening of monetary measures, which will bring down economic activities," Šoškić believes.
He noted that the interest rates of commercial banks are lower than inflation and concluded that this means that the banks are losing money.
INCREASED LOANS
The General Secretary of the Association of Banks of Serbia, Vladimir Vasić, stated that the price of loans increased by 1.5 percent due to the tightening of the monetary policy of the NBS.
He also stated that the rate of non-performing loans is good, as it is 2.8 percent, which means that there is liquidity in the country and that loans are paid off regularly.
He confirmed the estimates of the NBS regarding the trend of inflation in the following period, which predicts a drop in inflation next year and a return to the planned level by the end of 2024, writes bizlife.rs.
Source: bizlife.rs
