Serbia has European prices but not European GDP

Serbia is approaching the European Union through price increases rather than through an increase in the gross domestic product while electronic goods in Serbia are the most expensive in Europe.

The prices of goods and services in Serbia in 2019 were at 57% of the EU average, i.e. goods were 43% cheaper than the EU average, according to data from the European statistical agency, Eurostat.

It would be good news if Serbia’s gross domestic product per capita was not 59% lower than the EU average. At first glance, it can be seen that Serbia is approaching the European Union much faster in terms of prices than in terms of income, i.e. economic activity.

For example, compared to 2012, the price level in relation to the EU increased by 4.5 percentage points and GDP per capita by only one point.

According to Eurostat data, electronic devices such as computers, televisions, printers and scanners, audio systems and even software were 13% more expensive in Serbia than the EU average last year, with the exception of Iceland, the most expensive country in Europe.

For example, Germany was ranked below the UK since its electronics prices were 15%  cheaper than those in the UK. Electronic devices in Norway were only 1% more expensive than in Serbia.

Clothing prices were only 6% lower than the EU average, 15% higher than in Bulgaria, 13% higher than in Hungary and 12% higher than in Romania. On the other hand, clothes in Denmark are by far the most expensive in the EU because they are 32% more expensive than the EU average.

When we look at the most important part of the consumer basket, food and soft drinks, in Serbia, they were 22% cheaper than the EU average, while alcohol and tobacco were 38% cheaper. However, food in Poland, for example, is 30% cheaper than the EU average.

Compared to Denmark, which is the most expensive EU country in terms of groceries, Poland’s food was 60% cheaper.

Discover the most important foreign investments in Serbia in 2019: click here!

In terms of vehicle prices, i.e. means of transport, such as cars, motorcycles, bicycles, Serbia is among the cheapest countries in Europe, together with the Czech Republic, Estonia, Romania and Hungary, with prices 14% lower than the average. On the other hand, there are Denmark, the Netherlands and Ireland, where it is very expensive to buy a vehicle.

Finally, compared to the EU, Serbia is far cheaper when it comes to restaurant and hotel prices, which are 50% lower. Of the Member States, only Bulgaria offers cheaper restaurant services, 55% below the EU average.

However, Veroljub Dugalić, professor at the Faculty of Economics in Kragujevac, says that if we measure consumer purchasing power and income, life in the EU is cheaper.

(Danas, 23.06.2020)


This post is also available in: Italiano

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