Looking at 11 countries in the region of Southeast and Central Europe, Serbia has a higher GDP per capita (calculated as per purchasing power – PPP) – $16,089 – compared to Albania, Bosnia and Herzegovina and Macedonia.
On the other hand, the living standard in Romania is 60% higher than in Serbia, 63% in Croatia, and 44% in Bulgaria. For example, the Poles have a GDP per capita (PPP) almost twice as high as the citizens of Serbia. Over the past five years, this gap between countries in the region has been increasing rather than decreasing.
In the past five years (taking into account 2018 when Serbia’s growth expected to reach 4.2%, which is the highest annual growth in the past 10 years), the standard of Serbian citizens grew the slowest in the region, with the exception of Macedonia. According to the data from the IMF’s October World Economic Review, the GDP per capita measured by the parity of purchasing power in Serbia increased by 19.2% from 2014 to 2018, while in all other observed countries it was over 20%. Only Macedonia recorded a lower increase of 15.2%.
Romania’s GDP growth rate (PPP) per capita ranged from 31% in five years to 46.5% in the last seven years. It is interesting to note that all other countries, apart from Serbia and Macedonia, had a cumulative growth between 22 and 24% over the past five years.
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According to the Fiscal Council’s analysis, GDP per capita in Serbia in the last five years has grown by 10%, and the average in the CEE region is 20%. In response to the comments that the reason for slower growth in Serbia was a fiscal consolidation that lasted from the end of 2014 to the end of 2017, Pavle Petrovic, the president of the Fiscal Council, explained that such a difference cannot be attributed to the fiscal consolidation since both Romania and the Baltic countries carried out one too and still they recorded high growth rates.
The analysis conducted by Dragovan Milicevic, director of the Institute for Economic Analysis and Expertise, also confirms these results. According to his calculations, Serbia did not record consumption growth in the last seven years, when observed nominally according to the purchasing power of the domestic currency.
“As cumulative inflation in the previous seven-year period was 24.2%, there is no real growth in consumption, but actually there was a decline. When looking at consumption in internationally comparable currency like the euro, the situation is almost identical, since the external purchasing power of the dinar was accompanied by the diminished internal purchasing power, because the dinar/euro exchange rate in 2011 was 101.7 dinars, and in 2016, 123 dinars.
Also, during this period, the quantities of consumed groceries were reduced. This should also include the fact that, for the past seven years, the population in Serbia has decreased by almost half a million, notes Milicevic, which significantly influenced the reduction of consumption.
This post is also available in: Italiano