In two out of ten parameters – average wages and growth of private spending, Serbia is the worst of all of its neighbours. Romania, Bulgaria and Croatia top the list – Belgrade’s NIN weekly reports about the economic power index in eight countries in the region.
Just a few days before parliamentary elections in April 2016, Serbian Prime Minister Aleksandar Vučić had promised that an average wage would be 500 euros by the end of 2017. “In March this year, the average net wage will be 395 euros”, Vučić said at the Kopaonik Business Forum, only weeks before the Serbian presidential elections.
In less than a year, the average wage has dropped by more than 100 euros. Actual wages are even lower, and Serbia, with the average wage of 374 euros in 2016, fell to the last place in the region. With the exception of Macedonia which has been experiencing a political crisis for almost two years. In the seven observed countries, average wages last year were over 400 euros, with the highest of 788 euros in Croatia, 499 euros in Montenegro, and 492 euros in Bulgaria.
Vučić also said at the Kopaonik Business Forum that after the wage increase in Romania and Bulgaria, he was getting calls from foreign investors who originally wanted to invest there but now they have decided to invest in Serbia. The average employee in Serbia is ’cheaper’ by 50 euros than in Romania, and more than 100 euros in Bulgaria.
These two countries also have the highest economic power index, which includes 10 different economic parameters: gross domestic product per capita, economic growth rate, the average net wage, real wage growth, private spending of the population, inflation and unemployment rates, share that public and external debt have in GDP, and deficit /surplus in the balance of payments. All countries were rated against each parameter, in the range from one to eight points, after which the sum was multiplied by 0.125 to get the scale in the range of 1 to 10 points.
When it comes to the highest real GDP growth rate, highest wages and private spending, and also the lowest rate of inflation and unemployment, for the second year in a row, Romania is an undisputed leader in the region. Bulgaria takes the second place, with 8 points, and in third place is Croatia, with 6.25 points which is ahead of all the others countries on a scale of the average wage.
Serbia, together with Macedonia, Montenegro and Albania, is not better than other countries of the region in any of ten parameters. Albania fell to the last place because of the slowest economic growth, the lowest GDP per capita, the highest inflation and the biggest budget deficit. But Albanian index of economic power is only by 0.125 points lower than Serbian.
In five out of eight countries of the region, in last two years, GDP grew on average by more than 3% – in Romania 4.5%, Bulgaria 3.4%, Macedonia and Montenegro 3.1% and in Albania 3%. In Bosnia and Herzegovina, the average growth rate was 2.5% and in Croatia 2.1%. Only Serbia has recorded the growth of less than 2%.
On the other hand, compared to its neighbours, Serbia is the highest-ranked in regard to the unemployment rate, even though many economists consider that is one of the essential issues of the Serbian economy.
Serbia is facing other issues, too. Another reason for pessimism is the fact that since 2010 Serbia’s GDP has been growing slower than in other countries of the region. In the last seven years, the average rate of economic growth was only 0.5% – four times less than in other countries of the region and five times less than average for the countries of Central and Southeast Europe.
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