This may be worst year since 1990, but Serbia did a great job: Despite praise, electricity price must go up

Photo: Filip Plavcic

Serbia came out of the pandemic well, but then the energy crisis hit. Many good results have come from the cooperation with the IMF, this organization's representatives have said at the Kopaonik Business Forum.

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GDP affects the quality of life and in this sense, Serbia is not only at an advantage compared to the eurozone, but also to certain developing countries. GDP growth for the last 9 years has been impressive, noted the IMF.

The IMF's advice is to increase the volume of domestic investments, which are on an upward trajectory.

Regarding the new stand-by arrangement that Serbia recently signed with the IMF, it was said that energy challenges were "covered" above all, but there is also support for small and medium-sized enterprises.

Price of electricity must increase

"Electricity prices must rise, that's why we have look for ways of reducing fiscal costs," said the IMF and added that Serbia is one of the countries that has been allocating a lot from the budget to help the population during the crisis.

In particular, the IMF said that the price of electricity and gas is still low despite the increase in energy prices at the world level.

World Bank Chief Economist and Senior Vice President for Development Economics Indermit Gill also spoke at the forum.

He stated that 2023 could be the third worst non-recessionary year since 1990. However, according to him, Serbia has done a great job in order to maintain macroeconomic stability.

Gill added that emerging markets will pay the highest price.

The World Bank pointed out the three cardinal mistakes made by the world's political and financial players in the past period.

The first is that the Fed did not correctly interpret the rise in prices, that is, they saw it as a temporary situation. Another was China's policy, and in Europe, there have been wrong assessments regarding energy transition.

(Telegraf Biznis/V.B.)