Many people are under the impression that Serbia’s real inflation rate is higher than the official statistics show due to the increase in the price of foodstuffs.
According to the official statistical data, the year-on-year inflation in July in Serbia was 3.3% and since the beginning of the year, i.e. compared to December 2020, it was 3.7%. Food, fuel and cigarettes have become more expensive due to the semi-annual adjustment of excise duties and many say that because of that, inflation seems even higher.
Milojko Arsić, a professor at the Faculty of Economics in Belgrade, says that people in Serbia have previously doubted the official inflation figures, although he considers them relatively reliable. It is more about the perception that the products they buy have become more expensive because the prices of tens of thousands of other products have not increased. Fuel prices, for example, have risen, as has the cost of building materials.
“Prices are also rising in other countries. These are disturbances in the supply chains as a consequence of the pandemic. On the other hand, it is possible that such a widespread increase in prices is a consequence of the great fiscal and monetary expansion implemented by central banks and governments. Central banks have printed a lot of money and governments have also distributed a lot of money to alleviate the crisis. The money supply grew much faster than production,” Arsić explains.
According to him, it is possible that inflation will be slightly higher than the stated 3.3%, but it will not reach double digits.
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