Serbia weathers Covid to top Europe in growth

Despite harsh Covid-19 economic effects, Serbia appears to have weathered the storm to emerge tops in Europe in economic growth.

Serbia President Aleksandar Vucic announced the country had a growth of 5.2 per cent in the first quarter, compared to the Eurozone rate of minus 3.2 per cent.

“In the second quarter, Serbia had a growth of minus 6.3 per cent, while the Eurozone was at minus 14.7 per cent, and in the third quarter, when the Eurozone was at minus 4.3 per cent, Serbia's figure was only minus 1.4 per cent,” President Vucic said in a statement shared with the country’s foreign missions.

He said Montenegro recorded minus 26 per cent minus in the third quarter. 

Vucic said this was possible owing to the economic reforms the government has made since 2014 — when he was the premier— and the rapid reopening of the country after the first wave of coronavirus. 

He said the reforms made it possible to mitigate the effects of the pandemic by buying respirators, masks, gloves, protective suits, medicine, building and refurbishing hospitals.

"These are unprecedented results for Serbia. Was Serbia ever before the first in Europe in terms of growth rate? We will get the results on March 31 that will confirm that Serbia is number one in Europe. All that was possible thanks to people who believed in difficult changes," Vucic said. 

Global Risk Insights 2020 publication said the growth was due to structural factors such as a less dependence on tourism and effective fiscal and monetary responses, which significantly alleviated contractionary pressures.

The 2014 austerity measures, which were considered unpopular, enforced a 10 per cent pay cut on all civil servants and pensioners.

Serbian Ambassador to Kenya Dragan Županjevac said the move stabilised the country’s economy and its currency, at some point stronger than the Euro.

"We were also able to reduce unemployment, increase foreign direct investments; the growth rate is still high. These were strong fiscal measures,” Županjevac said at his embassy in Nairobi on Monday.

President Vucic said last year, Serbia had a net inflow of foreign direct investment amounting to €2.9 billion (Sh385 billion) and €3 billion gross, which means “many foreign companies such as Toyota Tires, Boysen, ZTF and Brose have invested in Serbia even in the year of crisis”. 

While other states are redirecting infrastructure budgets to Covid-19 response, Vucic said they will this year be able to build as many as six highways. 

And with the economic growth, the wages are now rising.

Vucic said Serbia now has the highest average wages in the region, amounting to €511 or and that in February, due to the January increase, the average wage will be €535 or €536.

Employment is increasing  n Serbia and the public debt has increased by less than in most European states.

In Italy the public debt surged to 156 per cent, in Germany to 87 per cent, in France to 114 per cent, in Croatia to 88 per cent, compared to Serbia’s 57 per cent. 

COVID-19 RESPONSE

The President rejected claims about bad results of Serbia in the fight against Covid-19, saying the country has recorded the lowest mortality rate in the region. 

On January 13, Euronews reported that while Serbia’s total death toll from the pandemic is relatively low, around 3,600, its rate of fatalities in the medical profession is far higher than in other nations.

The report said critics blame the state of the country’s healthcare system since a 2013 hiring freeze on public sector workers, which includes doctors and nurses.

But the Serbian leader said the country has done better compared to the region.

"The mortality rate in the region is as follows: Bulgaria 3.9, Bosnia and Herzegovina 3.7, Hungary 3.11, North Macedonia 3.03, Romania 2.48. Slovenia 2.15, Croatia 1.99, Montenegro 1.4, and Serbia 1.0. This can be seen in the graphs and is no fabrication," he said.

Vucic said he hopes 2021 will be better than 2020 and that the virus will be defeated through vaccination.

(Edited by V. Graham)