The citizens of the “economic tiger” will have more expensive heating, fuel, electricity, alcohol, and consumer goods by the end of the year. For their consolation, they have Vučić's "36 magnificent" products with reduced prices.
After the traditional September pocket-drainer for citizens who have schoolchildren in their households, as school supplies are a recurrent household budget-buster, on October 1st, a new wave of price increases followed.
Thanks to the earlier decision of the Government of Serbia, amendments to the Law on Excise Taxes have entered into force, which resulted in an eight percent increase in excise duty on oil derivatives, tobacco products, and alcoholic beverages, as well as coffee and liquids for use in e-cigarettes.
The regular change of fuel prices happens on Fridays, this time it fell on September 29, and according to the words of gas station owner Nebojsa Atanacković, the gas station attendants could not confirm with certainty whether part of the increased excise duty had already been included in the price of diesel or whether it was due to rise of the price of crude oil. Be that as it may, the price of diesel in Serbia went up by three dinars since September 29 - 214 dinars (1.82 euros), and gasoline marked a minimal reduction from 192 to 191 dinars (1.62 euros).
Already on October 3, the President of the Republic, Aleksandar Vučić, "asked" the Government of Serbia to control the price of oil, because "it has gone sky-high". The biggest problem, he says, is diesel because it is used by "buses and the army". So, fuel prices remained unchanged on the following Friday, October 6.
Statistics vs. reality
Vučić and members of the government like to talk about Serbia as the leader in the Balkans, a so-called economic tiger. At the beginning of September, the Republic Statistical Office (RSO) presented data showing that the prices of personal consumption products and services in August 2023, compared to July, recorded an average growth of 0.4 percent.
Compared to August of the previous year, they have increased by 11.5 percent, while compared to December 2022, they have increased by 6.4 percent on average. According to estimates by the National Bank of Serbia, inflation should amount to eight percent at the end of the year. Danica Popović, a professor at the Faculty of Economics at the University of Belgrade, recently warned that according to the forecasts of the Vienna Institute for International Economy, Serbia will meet the end of the year with a negative record - the highest inflation of about 12 percent (the region is at about 9 percent), as well as half the average growth of the Western Balkans - we are at about 1 percent, and the others at about 2 percent.
According to her, the truth about inflation in Serbia is simple: the country is allowed to increase the amount of money equal to the achieved economic growth, anything over that would create inflation, to which import inflation is then added.
"Even if imported inflation drops to zero, there is still no way out if you increase pensions, salaries, pay aid to the young, the old or anyone who might tug at President Vučić’s heart strings that day - and economic growth remains low, as it is now," Popović points out.
The Fiscal Council warns against indiscriminate spending
The Fiscal Council of Serbia constantly warns of this, the latest warnings came during the September presentation of the work report for 2022 before the Parliamentary Committee for Finance, State Budget, and Control of Public Spending. On that occasion, the president of the Fiscal Council, Pavle Petrović, criticized indiscriminate measures and grants from the budget.
As he stated, there is a fear that inflation will be eight percent by the end of the year after new budget grants, primarily a one-time aid of 10,000 dinars for children up to 16 years of age, for which, according to Finance Minister Sinisa Mali, about 1,101,000 children have applied.
A one-time payment of 20,000 dinars to pensioners is planned for the period between November 25 and December 5, coincidentally before the announced snap elections on 17 December. This type of aid first started several years ago and has been paid out in irregular time cycles, usually before some elections or New Year.
"These non-targeted measures in this year alone, is we are to add them all up, from agriculture and pensions, payments for young people, one-time benefits for pensioners, make up 0.7 percent of the GDP, excise taxes that are increased to pay for it, all of this will affect inflation and will push things in a bad direction," warned Petrović, as reported by N1.
The elderly, 1.6 million of them, received an extraordinary raise of 5.5 percent as of October 1, and a new one of 14.6 percent will follow from January 1, 2024.
On October 1, the Pensioner Cards, which provide discounts in over 650 businesses, including gas stations, became valid. Pension Cards are issued by the PDI Fund.
Vučić's commercial performance
Vučić himself inadvertently confirmed what the true standard of the citizens is, when, in an unusual performance from the Presidency of the Republic of Serbia, in a direct TV address, he launched the "Better Price" national campaign at the beginning of September. It is a reduction in the price of a certain number of items – “Pariser” salami, coffee, pasta, shampoo for babies and adults, potatoes, yogurt, etc.
On September 13, media outlets visited stores and retail chains in order to check whether the announced 20 products had really become cheaper. On the same day, since a lot of memes appeared on social media about the announcement, and the “Pariser” made headlines for days, Vučić posed for the cameras with ministers Sinisa Mali and Tomislav Momirović in the Presidency, showing how to eat a sandwich with “Pariser”. In the end, the recording was such that it did not show whether Vučić ate his “Pariser”. This caused a new barrage of dissatisfaction and ridicule, even a game came out, called "Eat Pariser".
Then the President of Serbia was a guest on TV Pink, with a supermarket basket from which he presented additional products that will be made cheaper, a total of 36.
After that, educational workers ended their protest in front of the Government building by hanging half of a “Pariser” on the front door. Presumably, it was to show that they can’t afford a whole one, even with the lower price.
The ugly conflict in Banjska significantly worsened the situation in Serbia, so the story of the “Pariser”, which turned a pre-election economic idea into a complete fiasco, simply died out.
What about the salaries?
During his appearance on the aforementioned “Hit-Tweet”, Vučić also announced that the average salary in Serbia in December this year will be 840 euros, and in the same month next year, it will be 960 euros.
The Statistical Office soon after announced that in July the average salary before taxes and contributions (net) was 83,781 dinars (about 715 euros), and its gross amount was 115,664 dinars (987 euros). Median net earnings for July 2023 amounted to 64,734 dinars (552 euros), which means that half of the employees earned up to the specified amount, SORS added.
In the same month, July 2023, the following average (net) salaries were recorded in the region:
- North Macedonia - 36,286 denars (590 euros)
- Bosnia and Herzegovina – 1,262 KM (645 euros)
- Montenegro - 797 euros
- Croatia – 1,141 euros
No "brotherly" energy prices
Despite the fact that Russia is the owner of the Oil Industry of Serbia and that Serbia is the only one in Europe that has not imposed sanctions on it, fuel and gas are not cheaper compared to the region. The Director of "Srbijagas" Dušan Bajatović also announced the increase in gas prices for November 1, consoling consumers that "the price will not go up by more than 10 percent".
The heating plants then requested 5 to 30 percent higher heating prices. The director of the District Heating Plants Association of Serbia, Dejan Stojanović, told RTS that not all heating plants will ask for an increase in the price of heating and that in 22 local governments, the price has been increased, primarily due to the increase in the purchase prices of gas and fuel oil.
Not long after, a new cold shower: electricity prices will rise by 9.28 percent from November 1.
Cheap state bread until the end of the year
In a sea of bad things, on October 5, those who are most poverty-stricken received information from the Association of Serbian Bakers that "Sava" bread will certainly not increase in price until the end of the year. "Sava" bread is the cheapest basic type of bread, a loaf weighing 500 grams. The president of the Association of Bakers of Serbia, Zoran Pralica, confirmed for Beta that bakers have 45 types of expenses, and among them, he mentioned an increase in wages for employees - instead of the recent 35,000-40,000 dinars, vendors now receive 70,000 dinars (598 euros), and bakers from 120,000 to 180,000 with night-time work. (from 1,024 to 1,536 euros).
In short, the citizens of the economic tiger will have more expensive heating, fuel, electricity, alcohol, and consumer goods by the end of the year. For their consolation, they have Vučić's "36 magnificent" products with reduced prices.
The blog was created as part of the “Tales from the Region” initiative led by Res Publica and Institute of Communication Studies, in cooperation with partners from Montenegro (PCNEN), Kosovo (Sbunker), Serbia (Autonomija), Bosnia and Herzegovina (Analiziraj.ba), and Albania (Exit), within the project "Use of facts-based journalism to raise awareness of and counteract disinformation in the North Macedonia media space (Use Facts)" with the support of the British Embassy in Skopje.
Please refer to the Terms before commenting and republishing the content. Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of the Institute of Communication Studies or the donor.