Economists:”The new 5.000 dinar one-off financial assistance for young people is populism”

After announcing higher pensions and civil servant salaries for the coming year, Serbian President Aleksandar Vučić announced another round of financial assistance from the state budget – this time, it’s the sum of 5,000 dinars as a ‘New Year’s gift’ to each young person in Serbia.

Economists are trying to understand the reason behind this new one-off financial assistance. It has been estimated that it will cost the state budget approximately EUR 45 million and experts point out that it is ‘too small to cause higher inflation’.

On the other hand, they say that even the idea that this will stimulate demand and help the domestic economy makes no sense, because a small part of that money, according to economists, will be spent on purchasing domestically produced goods.

Milorad Filipović, a professor at the Faculty of Economics in Belgrade, does not understand why this money is being given away.

“I do not see that it will cause a significant impact on the demand for domestic goods. On an individual level, 5,000 dinars will just about cover dinner at a restaurant. Young people will mainly spend it in bars and restaurants, maybe on telecommunication services. It is not clear to me what it will this money is going to be used for, apart from perpetuating populist politics and attracting young voters. Wouldn’t it be better to use that money to build at least half of the pipeline to Hungary? Those 5,000 dinars mean little to an individual, but it is a big expense for the state,” Filipović notes.

(Danas, 10.10.2022)


This post is also available in: Italiano

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