According to the professor of the Belgrade Banking Academy, Hasan Hanic, “one of the main priorities of the new government should be to continue helping the economy, given the latest alarming signs that the health situation is worsening”.
Like most of his peers, Hanic believes it is vital to preserve company liquidity, save jobs and increase production.
While advising further assistance to businesses, Hanic believes the most likely scenario is that, regardless of the signs of a new wave of the coronavirus contagion emerging, the Serbian economy can be expected to grow.
“It is expected that the government will find appropriate solutions and thus increase economic growth in the next period,” Hanic told Tanjug while underlining that the new government should be careful not to increase debt given that “the space for taking out more loans has already been reduced and the fiscal deficit is increasing and should not exceed a certain limit”.
It is essential, however, Hanic continues, that the new government does not allow the economy to “slow down” which will lead to job losses, company closures and thus jeopardize the basis for long-term economic growth.
Therefore, the priorities of the new government in the next period should be investments in infrastructure, especially in roads, as well as in higher education, health and the further development of digitalisation.
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Reforming the education system is also needed, because “new skills and programmes for the development of entrepreneurship and knowledge-based innovations are needed”.
“In an economic sense, what represents a challenge for the new government is that our economy can be” frozen” due to the stagnation and decline of the economic activity of the countries of the region and of the countries that represent our main external trade partners,” Professor Hanic warns.
“The drop in demand in overseas markets is a very important limiting factor,” he adds.
This is why it is important, he says, “to guarantee a slight increase in wages and pensions which will result in an increase in the purchasing power of the population, in order to guarantee economic growth based on the growth of domestic demand”.
Hanic finally concludes that domestic demand growth coupled with investments should be a source of economic growth in the next period.
This post is also available in: Italiano