The average net salary in Serbia in April 2022 was 73,012 dinars; in September 2023 it stood at 85,066 dinars, a 16.5 percent increase.
At the same time, the consumer price index went up by 17.7 percent in the same period, according to the data from the State Statistics Office.
“This means that the purchasing power of the population decreased by 1.2 percent on average,” explains Branimir Jovanović from the Vienna Institute for International Economic Studies for the BBC Serbia.
“The average Serbian resident certainly lives worse now in economic terms than in April 2022,” he adds.
Comparing the growth of average wages and the value of the average consumer basket in Serbia is perhaps the best way to see that the living standard has dropped compared to April 2022, points out Professor Milan Nedeljković, Dean of the Faculty of Economics, Finance and Administration (FEFA).
In April 2022, the average monthly consumer basket for a family of four cost 83,633 dinars while the minimum consumer basket was 43,198 dinars.
The latest published data from August 2023 show that the average monthly consumer basket is now worth 100,157 dinars, while the minimum basket is worth 50,050 dinars.
“Wages in this period did not grow equally in different sectors either – in some they increased faster than the inflation and in others they stagnated,” he notes.
Median wage, that is the wage earned by more than half of employees, grew at a different pace than the average wage between April 2022 and September 2023.
While half of the employees in Serbia earned up to 65,727 dinars in September of this year, in April last year that amount was 55,267 dinars.
Professor Nedeljković points to inflation as one of the decisive drivers of wage growth in this period. “What is different today compared to previous periods of high inflation is the great need for workforce in our country and the world. This is a positive development as it gives people a bit more power to negotiate wages or pay rise, especially in developing sectors,” he adds.
Economist Branimir Jovanović estimates that the deterioration of the living standard in Serbia since April last year is “partially a consequence of global trends”, primarily the war in Ukraine, global inflation and the increase in interest rates globally.
“Nevertheless, it seems that the Serbian authorities could have done more to protect citizens – inflation has gotten out of control and it is no coincidence that Serbia has the highest inflation in the region this year. I don’t think the government did enough to increase people’s incomes. Also, the fiscal policy was excessively restrictive this whole year, which further slowed down the already sluggish economy,” Jovanović adds.
Although the prices of many basic groceries are now much higher than in April 2022, the Serbian government decided in September to cap some of them. Prices of cooking oil, meat, sugar, meat products, flour, milk, certain fruits and vegetables and other groceries were capped. This move will “probably slow down inflation”, but it will not stop it”, says Branimir Jovanović and adds: ”Despite this move, prices in October went up by 0.3 percent on average compared to September and in the coming months they can be expected to be even higher, especially when the price restriction is lifted.”
(Naslovi.net, BBC Serbia, 29.11.2023)
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