Serbia has third highest inflation in Europe

Inflation in Serbia stood at 7.5 percent in November, the highest in eight years. In developed countries, such inflation has not been recorded for several decades.

There was a consensus among central banks that this was a consequence of supply disruptions and was temporary. However, Milojko Arsić, professor at the Faculty of Economics in Belgrade, points out that there has been a disruption in a large number of unrelated markets such as energy, food and chips, which indicates that the cause of inflation is tied to demand due to fiscal and monetary expansion worldwide.

“Large central banks are becoming aware that high inflation is not temporary and announcing an increase in benchmark interest rates. The Fed has announced an increase from next year. The Bank of England has already increased its benchmark interest rate, as have some central banks in Central Europe. The ECB has not yet announced an increase in interest rates, but decisions are made more slowly in the eurozone, due to the different level of recovery in EU countries,” pointed out Professor Arsić.

Out of European countries, only Estonia and Lithuania had higher year-on-year inflation in November than Serbia, and that coincides with the fiscal expansion during the pandemic.

(Danas, 23.12.2021)

Share this post

Leave a Reply

Your email address will not be published. Required fields are marked *

scroll to top