Nemanja Vuksanovic, from the Foundation for the Development of Economic Science, said in an interview for N1, that based on the current indicators, the average salary in Serbia will struggle to amount to 500 euros.
He also pointed out that the data on the average wage does not paint the right picture of the living standard, because the majority of workforce in Serbia has the monthly salary in the region of 25,000 dinars.
The average net salary for April 2018 was 416 euros, according to the data collated by the State Statistical Office. Vuksanovic explained for N1 that that was a nominal growth of 5 percent, or a real growth of 3 percent, but that the claims made by certain officials that the average salary would top 500 euros by the year end were unrealistic.
Vuksanovic reminded that politicians base their optimism on the data on the economic growth, which reached 4.6 percent in the first quarter of 2018, but also warns that other factors – above all, productivity growth, the dinar exchange rate against the euro and the fluctuations in civil servant salaries – also affect the average salary.
Although economic growth in the Q1 of the current year is one of the biggest in the last ten years, Vuksanovic pointed out that comparable countries still recorded better results, and that it was primarily agriculture and the energy sector that should be credited for these results, compared to the poor results from the beginning of 2017.
In order to bring the average salary closer to the amount of 500 euros, there should be a sudden increase in productivity, which is not expected, explains Vuksanovic. The other way that the average salary could increase significantly is the appreciation of the dinar against euro, which is also not realistic and can lead to the deterioration of external debt.
Vuksanović adds that the average salary does not paint a true picture of the living standard in the country, because most of the Serbian workforce earns less than the average salary. Since estimated values can therefore throw the data on average salary out of balance, so a large number of other countries use median and modal income for comparison.
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Median income is the amount that divides the income distribution into two equal groups, half having income above that amount, and half having income below that amount. In Serbia, the median income currently amounts to 40,000 dinars.
Modal income is the salary received by the largest number of employees, and in Serbia it is about 25,000 dinars, which is half compared to the average income, Vuksanovic points out.
Almost a fifth of workers in Serbia receive modal income. Considering this, there is definitely no place for luxury goods but only for basic products in the average consumer basket.
Vuksanovic also underlines that public sector wages are still 20% higher than in the private sector, and that the private sector should not always lag behind the private sector in regard to wages, quite the opposite.
This post is also available in: Italiano