Monday, August 01, 2005
Inflation predictions continue to soar
The latest evaluations by the Institute for Market Research show that the inflation rate in Serbia for 2005 will be “in the best case scenario, about 17 percent.”
Institute experts say that the official estimate of 13.7 percent is “unrealistic.” At a press conference held by the institute, official Sasa Djogovic, that the pressure on prices continues to grow, especially for crude products, which will have an increased effect on the prices of consumer products.
Only a restrictive monetary policy can stop the rise in inflation, he said, adding that decreasing the value added taxes for some products will only slow the inflation process, not stop it.
The worth of the dinar against the euro will experience yet another depression by the end of the year which, if it continues to go on for a longer period of time, could heighten inflationary pressure once again, Djogovic said.
Djogovic said that real investment into Serbian production does not exist yet, which is why an amortization of the excess work force is not possible currently, meaning there are no stronger economic persuasions available.
The economic climate is unsatisfactory; the growth in income is a result of job cuts not an increase in production, Djogovic said, even if it is taken into consideration that many predictions see a slight rise in production taking place by the end of the year.
Institute experts say that the official estimate of 13.7 percent is “unrealistic.” At a press conference held by the institute, official Sasa Djogovic, that the pressure on prices continues to grow, especially for crude products, which will have an increased effect on the prices of consumer products.
Only a restrictive monetary policy can stop the rise in inflation, he said, adding that decreasing the value added taxes for some products will only slow the inflation process, not stop it.
The worth of the dinar against the euro will experience yet another depression by the end of the year which, if it continues to go on for a longer period of time, could heighten inflationary pressure once again, Djogovic said.
Djogovic said that real investment into Serbian production does not exist yet, which is why an amortization of the excess work force is not possible currently, meaning there are no stronger economic persuasions available.
The economic climate is unsatisfactory; the growth in income is a result of job cuts not an increase in production, Djogovic said, even if it is taken into consideration that many predictions see a slight rise in production taking place by the end of the year.
