Pensions in Serbia jumped sharply this December. If the state top is to be believed, it is only the beginning, since "historical" figures are already being announced for the next year. However, if the data of the World Bank is to be believed, Serbia can only expect slower economic growth compared to previous years, as well as an increase in inflation.
On the occasion of the 12,2 percent increase that pensioners received at the beginning of the month, the Minister of Finance Sinish Mali announced on Instagram that the average pension in Serbia thus rose to 437 euros, while in 2026 it is expected to amount to 488 euros.
It is nothing new that representatives of the government led by Vučić brag about the increase in pensions, but they keep silent about the fact that economic growth and inflation, for which Serbia does not have the brightest forecasts, have a greater impact on the real quality of life of our oldest fellow citizens.
In October, the World Bank published an estimate that Serbia's economic growth will fall from the expected 3,5 to 2,8 percent, while stagnation between three and four percent is expected in the coming years. On the other hand, during the year, inflation came out of the target corridor of the National Bank of Serbia, and prices continued to rise.
"Inflation should also be looked at"
In his official Instagram post, Mali added that the figure of 488 euros in the coming year will be "a huge difference compared to 2012 when the average pension was 204 euros."
Pensions have grown progressively, especially in recent years, from 26.324 dinars in 2018 to 50.686 dinars this year. However, as economist Milan Kovačević told Vreme, there were no significant benefits from this.
"In the last five or six years, we have had the highest inflation in Europe, which means that we do not benefit from that increase. It is even worse, as we increase both and become less competitive with the world," Kovačević explains and adds that it is not so important to target the pension figure itself.
"It is smarter to target what inflation will be, because inflation has been a problem for our living standards, not increase," he says.
"Increase for political purposes"
Kovačević also says that the increase in pensions is mainly used for political purposes, while the real standard of living does not improve.
"In various administrative ways, we increased average salaries and pensions. Now, pensions have suddenly been increased by 12,2 percent. It was decided completely arbitrarily, in order to use the nominal values of both salary and pension for political purposes. We are already suffering big losses because we do not solve the problem of oil derivatives. We can only expect a decrease in the standard of living," Kovačević adds.
Sanctions
Sanctions on the Serbian oil industry affect the entire economy, but if they are not limited to the NIS, Kovačević believes, the consequences for the standard of living can be even greater.
"We have imposed sanctions, our refinery cannot work. If this continues and we fail to solve it, financial sanctions may also be imposed on us. This means that we will not be able to pay foreign currency imports and collect exports. The sanctions in 1992 were in more difficult general conditions and were wider, no imports and exports were allowed. But this time if we receive sanctions only for payment and collection, we will have a catastrophic decline in the social product," he concludes. Kovacevic.
