Inflation will have to “explode”
Slobodan Milosavljević said that the jump in value of the dinar against the euro is a result of the foreign currency surplus.Source: Beta
In an interview with Novi Sad daily Dnevnik, the President of the Serbian Chamber of Commerce said that inflation has been decrease artificially and that “it will have to explode,” adding that “some increased expenses must occur, if for no other reason, then for the survival of the current system.”
“The National Bank of Serbia is making a big mistake by not intervening on the foreign currency market, protecting the dinar so that it does not grow in value. This way we are in a paradoxical situation – the foreign currency reserve is almost at ten billion dollars, and the economy is dropping dead. Exports are in a catastrophic state. All large exporters are suffering losses and the losses are being covered by making the prices on the domestic market higher.” Milosavljević said.
He added that Serbia has the most rigid monetary politics in Europe, stating that the obligatory reserve of 60 percent is blocking activity within the Serbian economy, “not allowing it to be competitive, not in Europe but in its own region.”
Milosavljević said that the Serbian Government will have a difficult job ahead of it, because Serbia needs “a historical-civilizational transition from macro-economy to micro-economy,” with the existence of three groups of big problems; the postponement of the artificially halted increase in prices, the removal of disparities and the backing away from rigid monetary politics, but also the unrealistic expectations, because “wherever a minister goes, he promises people that their problems will be solved by the National Investment Plan.”