Serbia's Economic Measures Signal Approaching Elections, Not Growth: Forbes Editor

Ivan Radak, editor-in-chief of Forbes Serbia, has characterized the Serbian government's recently announced economic measures as a clear signal of impending elections, rather than a strategy for economic growth. He specifically pointed to one-time payments for pensioners and potential distributions to all adult citizens as tactics to boost consumption.

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There is no economy in this, it leans more towards social welfare, because an economic measure would mean something that generates growth. Here, we will have high consumption, so we might find ourselves in a situation where inflationary pressure increases.

"There is no economy in this, it leans more towards social welfare, because an economic measure would mean something that generates growth. Here, we will have high consumption, so we might find ourselves in a situation where inflationary pressure increases," Radak explained. He noted that the planned payments to pensioners alone amount to approximately 300 million euros, with the total potentially reaching 600 million euros if extended to all adult citizens.

Radak expressed concern that these measures run counter to the recommendations of the International Monetary Fund (IMF). While acknowledging that the IMF does not typically oppose such aid, he emphasized that the fund advises it be directed towards the poorest segments of the population. "We are doing the exact opposite," he stated, suggesting the distribution is broad rather than targeted.

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We are doing the exact opposite.

President Aleksandar Vučić announced the measures, including payments of 35,000, 27,500, or 20,000 dinars for pensioners depending on their pension amount. He also hinted at similar "gifts" for all adult citizens, claiming the funds would not come from the budget but from "exploring things." Radak, however, speculated that the money could come from borrowing, bond issuance, or the postponement of other expenses, such as infrastructure projects. He concluded that the significant spending indicates elections are likely close, as such expenditure would be unlikely if elections were a year away.

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All the adult citizens will be made happy.