Economics Faculty professor: Serbian government would fare better if it didn’t spend so much

Professor of the Faculty of Economics in Belgrade, Ljubodrag Savić, said today, that the Serbian government’s mandate began in difficult conditions and that some problems would have been solved more easily if the government did not spend budget money so recklessly two years ago.

“This government is more or less a continuation of the old one with a good part of the ministers being the same as in the last government, including the prime minister. The difference is that, in the last term, the government had to work through the coronavirus pandemic, and now it has to deal with the crisis brought on by the war in Ukraine. Some problems would have been solved more easily if the government did not spend budget money so recklessly two years ago,” Professor Savić noted.

He added that around 650 million euros were spent on the import of electricity due to the accident at the Nikola Tesla thermal power plant, and another problem the government faced was pressure from Europe to impose sanctions on Russia.

According to him, the crisis surrounding Kosovo was draining state resources and distracting attention from everyday activities.

Professor Savić also commented on the government capping prices of certain products:” Price capping is never a good measure and does not produce the expected effects, but the government was forced to do it to avoid the risk of people rushing to empty out shop shelves in fear of price increases. That measure, which I expect to be repealed in the next few months, produced some effects, but nobody can say for sure what kind of effects”, Professor Savić went on to say.

Professor Savić also said that many products, due to the war in Ukraine and the global disruption in the market, have become more expensive, which is why a lot of money was spent on importing oil and gas, and that even the government did not expect interest rates on loans to rise.

Inflation, according to him, is mostly of an “imported” nature and all governments in the world are trying to curb it because it has become the number one problem, not only in Serbia, but in the rest of the world too. Plus, Serbia’s borrowing costs abroad have increased a lot; something that the Serbian government cannot be blamed for.

(Danas, 11.02.2023)


This post is also available in: Italiano

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