According to the professor of the Faculty of Economics, Milorad Filipović, and the program director of Lubeck’s economic research unit, Mihajlo Gajić, the consequences of the war in Ukraine could be very serious for Serbia.
“I fear that there may be long-term consequences, especially in relation to the Russian Federation, with which we trade a lot but with a large deficit and on which we depend largely for energy,” says Professor Filipović. He underlines that this year and the next few, he expects the price of energy, particularly oil and gas, to drastically go up which will definitely increase inflation in Serbia.
“When the prices of fuel and food in our country are no longer frozen, and taking into account that Russia and Ukraine are the largest producers of wheat, we can expect significant inflationary blows to our economy,” Filipović says, adding that one positive thing is that an increase in global wheat price is expected to happen, which puts Serbia, as a significant wheat producer in the region, in a good position as we can expect more revenue from wheat export.
Gajić says that the price of fuel in Serbia is getting closer to the 200 dinars per litre mark, although the most important thing is what will happen to the world economy in general and its spillover effect on Serbia.
He also says that the sanctions imposed on Russia by the EU “are a double-edged sword” and pointed out that the companies from the EU countries that had strong lobbying abilities managed to avoid joining the sanctions against the Russian Federation, like, for instance, luxury goods producers from Italy.
Professor Filipović believes that there we should not fear shortages in Serbia due to the Ukrainian crisis, but that there might be problems around gas supply “because natural gas transport cannot skip countries who have imposed sanctions on Russia to be delivered to us“. „I don’t think we will have problems with food supply either,“ he said, adding that the expulsion of Russian banks from the SWIFT system will have consequences because there are no realistic alternatives to this.
The two experts agree that the EU countries have made exceptions for some companies, including Gazprom, which is important for the EU economy, and reminded that the same principle applied to Yugoslavia in the 1990s, when there was no ban on the export of frozen raspberries because it was a product that Europe needed as much as it needs Russian gas now.
Gajić says that there are no Russian banks in Serbia considering that Sberbank has just been sold to AIK Bank. He also mentioned that when the National Bank of Serbia saw that sanctions would be imposed against Sberbank, it expressly gave AIK Bank permission to take over this Russian bank.
All in all, according to Gajić, the Serbian banking system is stable and solvent and, in that sense, the crisis around Ukraine should not have a major impact on Serbia.
Regarding the political aspects of the crisis in Ukraine and Serbia’s position on the international stage, Gajić believes that Serbia will not become an EU member in the near future, and he also expects stronger political pressures on its EU integration path: “We cannot sit in two chairs forever.”
Professor Filipović thinks the same and adds that Serbia’s political stance regarding the Ukraine conflict may cost dearly us in the progress towards EU membership. “As the conflict in Ukraine further escalates, our room for maneuver will become increasingly smaller until we are openly told to decide where and with whom we stand. I think that will happen quickly if the escalation of the war in Ukraine continues,” Professor Filipović concluded.
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