Popovic: Growth of average salary and pension higher than inflation, but NBS forgets about food price increase

The average salaries and pension in Serbia are nominally growing more than the average inflation rate, but that doesn’t reflect the reality, due to the extremely high growth of the food prices, said Professor Emeritus of Macroeconomic Models at the Faculty of Economics in Belgrade Danica Popovic.

– Even Prime Minister Milos Vucevic announced that he would ask the Security Intelligence Agency and the National Bank of Serbia (NBS) for help in determining who contributes to the prices – Popovic said for the Beta news agency.

The public, she pointed out, is asking why the inflation has grown, and the response of the NBS should not be listing what happened last year or the year before. That is how, according to her, “emperors respond, and not state officials which are responsible for the price growth, because the inflation growth is proportional to the loosening of the reins in the monetary policy.”

The director-general of the Sector for Economic Research and Statistics at the NBS, Savo Jakovljevic, said several days ago that the inflation had not neutralized the growth of salaries and pensions. He said that the data showed that, since 2021, when the average inflation had grown due to global factors and amounted to 4.1%, the average net salary had grown 9.6%. In 2022, the inflation grew 11.9%, and the average net salary grew 13.8%. In 2023, the average inflation grew 12.1%, and the average salary grew 14.8%. In the five months of this year, the average inflation grew 5.3%, and the average salary grew 15.2%. The average pension, as he said, in 2022 grew slightly less than the inflation, 7%, and the inflation was 11.9%, but in 2023, it was compensated for, because the average pension grew 21.9%, and the inflation was 12.1%.

– The information about the average salaries, pensions and inflation provides the general overview. The data provided by the NBS are correct, but it is more important what the median salary is, that is, how many people are paid the median salary – notes Popovic.

She adds that the data of the Statistical Office of the Republic of Serbia show that, in May this year, the average salary was around RSD 100,000, and as many as a half of those employed were paid less than RSD 77,570.

– What does this mean, then? That the data about the value of the average salary bear no significance to the majority of the employees – Popovic estimated.

Any comparison, she said, which doesn’t mention this distortion is not fair from the aspect of objectivity and the realistic situation in Serbia.

– Aleksandar Vucic and the government are trying with all their might to maintain the identical growth of the salaries and pensions. When salary increases are not working, the money is shoveled in. I expect important people from the area of Krupanj and Gornje Nedeljice to get big donations, at least the first stone of a road and who knows what else, because it needs to be shown that the president is on their side, even if he starts mining lithium tomorrow – for their own good, of course – said Popovic.

She says that “certain moments are used for political purposes, so some layers of society get more, and on average, everybody will get something, because that’s this government’s policy.”

According to her, when it comes to the minimum wage, Serbia is only ahead of North Macedonia and Albania, because the per capita gross domestic product (GDP) is “somewhere around there.”

– Our place on the minimum wage scale matches the level of the GDP, and with that, the level of the poverty in which Serbia lives, because it is at the bottom of Europe, maybe only Bosnia and Herzegovina is below, along with North Macedonia and Albania – said Popovic.

She points out that the list has not changed for the past 50 years, and it is only Montenegro that is now slightly above Serbia.

Popovic says that it’s difficult to change the minimum wage before the economic growth jumps, because it is not enough to merely print the money for the salaries, because that stimulates the inflation.

Ekonomski fakultet Beograd

Narodna banka Srbije Beograd

Faculty of Economics Belgrade

National Bank of Serbia

NBS

Danica Popović

Miloš Vučević

growth of salaries and pensions in Serbia

inflation

economic growth