Economists: Salary of EUR 900 and Pension Over EUR 400 by 2025 Unrealistic Goals Set by the Government

An average salary of over EUR 900 and a pension of over EUR 400 by 2025, as announced in the Serbia 2025 program, are realistic even with the crisis, Serbian Finance Minister Sinisa Mali said a few days ago and added that the state would invest EUR 14 billion in the infrastructure and that the epidemic had only delayed this by a couple of months.

The minister is optimistic in the short-term as well.

– We want there to be no GDP drop this year. If we manage to do so in the time of the largest economic crisis, we have won. If we manage to do so, we are aiming for growth rates of 7.5% which give us the right to say that we are getting closer to the standard of developed countries – Mali said, although his ministry had projected a GDP drop of 1.8% only several weeks before, while preparing a budget rebalance, whereas the NBS had estimated a drop of 1.5% several days before.

The economists that Danas talked to, are, however, very skeptical about the minister's promises and wishes, even when it comes to the current year, let alone for 2025.

Economist Mladjen Kovacevic points out that politicians always make promises and that they do so more easily the longer the term is.

– No one alive can predict what will happen in the crisis, especially in the eurozone, where most of our trade partners come from. For our industrial production, the situation in Germany and Italy is crucial, because, although they are formally registered as our companies, a large number of factories depend on the production in these countries. Furthermore, I am convinced that the inflow of foreign direct investments will be reduced due to the crisis in the EU – Kovacevic emphasizes and points to the reduction of payment transfers in the upcoming period due to the return of a large number of people from abroad.

When the Serbia 2025 program was announced, featuring big state investments and ambitious goals, many compared it to the national investment plan from slightly over a decade before, which had ended unsuccessfully. Economist Ljubomir Madzar points out that the program was not feasible even before the epidemic, let alone after it.

– That's a fantasy that has no basis in economic reality and it is not clear how the growth rates and other related indicators were calculated. If there was an economic basis for it, they would also present, along with the projection, the way they got those numbers and whether it is scientifically sound. However, they offered nothing except for their wishes, no analysis, so there's no possibility of any deeper discussion – Madzar points out and notes that a reasonable person cannot understand how such numbers can be publicly announced.

Sasa Djogovic of the Market Research Institute also points out that, even without the crisis, the plan was not likely to work, but also points to the essential flaw in the state's plan.

– The state should leave room for the development of domestic entrepreneurship and enable an increase in the income through financial relaxation. Here, it's the opposite. The public sector is supported, whereas the private one is held back. The state is trying to be the main player in the market and to have the salaries depend on the government, instead of having market players determine that themselves – Djogovic says and adds that, when it comes to the economic development, we primarily need to lean on domestic entrepreneurs, whereas foreign investments can only be a support to the development.

Ministarstvo finansija Republike Srbije

IZIT Institut za istraživanje tržišta a.d. Beograd

Međunarodni monetarni fond-MMF Beograd

Ministry of Finance

Market Research Institute

IMF

average salary

average salary in Serbia

Siniša Mali

Mlađen Kovačević

Serbia 2025 program

Ljubomir Madžar

Saša Đogović