PRESS Archive

IZIT: Dinar Continues to Weaken

In 2011 likely to be exceeded projected inflation will be continued weakening of the dinar, and the growth of average wages will be induced only through public sector wages, is the result of research by the Institute for Market Research (IMR).

- We ended last year with an exceeded projected inflation and in 2011 we are in for very high inflationary expectations. All this will be affected by the further depreciation of the domestic currency, price growth under state jurisdiction, the excise policy. Even the businesspeople bet that inflation would be higher by two percentage points from the projected. I cannot make a precise prognosis, but trends are such that this year inflation is projected to be exceeded – said Sasa Đogovic from IMR.

When it comes to the growth in prices, Đogovic said that as much as 59 percent of the entrepreneurs are counting on price increases over the next three months. He also pointed out that the standard of living is very low, as illustrated by the fact that the average three-member household in Serbia is spending as much as 41 percent of its income on food and drink.

Economist Mlađan Kovacevic commented on the statements of Serbia’s alleged exiting the crisis by saying that Serbia is far from it.

- If you sell Telecom the standard of living may be temporarily repaired, but the sale of Telecom will leave us without our golden chicken. This privatization is not an investment, but rather a de-investment in terms of Serbia – said Kovacevic.

If NBS continues with interventions on the foreign exchange market the rate might in this year be around 115, he said, adding that the realistic exchange rate should be at 130 dinars for one Euro, “but in times of crisis rarely anyone tells the truth.”