If the coronavirus epidemic ends by the end of May, the decline in Serbia’s gross domestic product (GDP) in 2020 will range from 5 to 10%, said Vladimir Gligorov, an expert from the Institute of International Economic Studies in Vienna.
“If GDP decreases in the first and second quarter of this year by 10% and the epidemic continues until the end of May, the decline in GDP over the whole year could be 5%. However, given the high overall share of services in the total production in Serbia, this is probably an optimistic estimate, so a decline of 10% would come as no surprise,” the expert says.
Gligorov added that if the epidemic ended in two months’ time, it would not be unnatural for people to want to compensate for the loss of jobs and consumption, in which case secondary consequences of the recession should not be expected, especially if the government and the National Bank of Serbia (NBS) focus on supporting citizens and the economy.
“The government’s assistance programme for businesses and citizens is similar to the programmes in other countries and, apart from being somewhat imprecise, it is also unclear how it will be implemented,” Gligorov adds.
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When asked whether the €5.1 billion of planned assistance to businesses and citizens is too high a cost for Serbia’s budget, Gligorov said that it is not “especially since it is not clear how much of it will be spent and where it all comes from.
“This amount could be equal to the value of 10% of the annual production in Serbia, which means that the state expected losses, due to the pandemic and limited movement of people,” Gligorov added.
He went on to say that the question now is whether the aid programme shares the burden equally among everybody because company owners should not be allowed to disburse dividends from the profits even if their companies are not operational, while the poorest strata of the population and undocumented workers are among those particularly affected.
(Radio Free Europe, 09.04.2020)
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