Mali: "Inflation will be stabilized in a few months"

Mali: "Inflation will be stabilized in a few months"

Mali pointed out that despite the great crisis in the world, Serbia managed to achieve economic growth in the first half of the year, 4.4 percent in the first quarter and 4.1 percent in the second. He stated that the state measures imposed on the prices of basic foodstuffs, fuel, and energy products, were aimed to prevent prices from "hitting the sky", as happens in some more developed countries.

He adds that the government talks weekly with producers and traders in order to stabilize prices.

Mali emphasized that the exchange rate of the RSD is stable and that it is perhaps the most important instrument for keeping inflation under control, despite the huge crisis. He noted that the circumstances are extraordinary, due to the pandemic, disrupted supply chains, the energy crisis, and the conflict in Ukraine.

"Consequentially, the result you have is the year-on-year inflation in June at 11.9 percent, but it would have been much higher if we had not taken all the decisions and measures. At the same time, most of this inflation was imported. We can control the prices of basic foodstuffs and energy because it is under our control, but you cannot control the import of some goods from abroad, since inflation is built into the price of those goods when it comes to packaging, cardboard, and various other things, which all affect inflation in our country," Mali said.

He added that we deal with the problem of inflation better than other countries.

"The whole world is facing huge problems. All economists say that there hasn't been a crisis like this since the Second World War," said Mali and pointed out that the prices of gas and electricity in the world have drastically increased, which has led to a big jump and record inflation in America, Europe, Great Britain...

Mali said that European countries are entering recession and people are losing their jobs and the real effects of the crisis will only be seen in the fall.

"Because of this, the Government of Serbia controls the prices of basic foodstuffs and the state has taken the burden of the crisis," Mali stressed.

He said that the price of electricity in Serbia has not changed for a long time, which has become unsustainable and will have to change in the future.

"Despite the sizeable increase in electricity prices worldwide, we have kept the prices at a low level both for the economy and citizens. We also control fuel and gas prices, and we try to protect citizens' living standards as much as possible," said Mali.

He noted that despite all this, Serbia has not stopped any major projects and the state settles all payments and duties timely.

Mali stated that, for example, 10 new highways and expressways are being built, hospitals are being reconstructed, new stadiums are being built, and sewage systems and wastewater treatment plants are being built...

"Our GDP growth rate was 4.4 percent in the first quarter, and 4.1 percent in the second. Large and developed European countries are already in recession and have negative growth rates. We are still holding up well. In the first six months, we had 1.4 billion euros in foreign direct investments. Last year we had 3.9 billion euros, which was more than in 2019. Our unemployment rate is lower today than in 2019."

Mali also emphasized that despite the high inflationary pressure, our public finances are stable as well as the exchange rates, since the government managed to ensure a still relatively decent and high growth rate of the economy, providing stability to citizens and industry.

He added that the state had about 190 billion dinars in its account on July 15 and emphasized that we are completely liquid.

We are trying to deal with all adversities in a responsible way, Mali said.