International Information Centre for Balkan Studies

Wheat sowing running late in Serbia

October 19, 2020

This month’s rainy weather has forced farmers to postpone sowing their wheat, a wheat expert told the Beta news agency on Monday.

        Zito Srbije (Wheat Serbia) Association chief Vukosav Sakovic said that wheat had been sown on just 10 percent of the planned 600,000 hectares of farmland. According to him, the rains prevented farmers from preparing the ground for the sowing and slowed down the corn harvest. “Experts say that the best time to sow wheat, barley and rye is by October 25 but in Serbia that can extend into November,” Sakovic said.  

He said that the rising price of wheat (ranging from 19.5 to 20 Dinars a kilogram) makes it more interesting for farmers to sow wheat and added that he expects them to sow 50,000 hectares more than in 2019. Sakovic said that farmers in Serbia don’t sell their wheat as long as the price keeps rising and then offer it in bulk when the price falls. He said the price and yield will be affected by the fact that some 50 percent of the declared seed will be used.

Source:  http://rs.n1info.com/English/NEWS/a662455/Wheat-sowing-late.html

World Bank: Covid-19 pandemic wreaking havoc on Bosnia's economy

October 17, 2020

The coronavirus pandemic is wreaking havoc on the economy of Bosnia and Herzegovina, causing great damage to firms and labour markets, warned the latest blog post written by the World Bank experts, adding that the pandemic reversed positive economic outlook of the country which is now facing the largest recession since the global financial crisis.

“As a result, the number of individuals in paid employment declined by about 3 percent, as of July 2020 compared to the same time in 2019, and the number of citizens registered as unemployed increased by more than 19,000,” wrote Jamele Rigolini and Leonardo Lucchetti, the World Bank's economists.

The experts explained the country was lacking exact data on current poverty data in Bosnia and Herzegovina, so they conducted a simulation analysis to forecast the impact of the pandemic on poverty, i.e. people living on less than $5.50 a day.

“The results show that more than 85,000 individuals could be impoverished if there were no government responses in BiH (Bosnia and Herzegovina), and that many of those likely to fall into poverty were not covered by social protection programs before the pandemic hit. Preliminary results of a recent online survey we conducted through a market research agency also provide some evidence of the disproportionate negative effect of the pandemic on vulnerable groups. The survey was conducted from June 5 - 19, and 2,009 adults were interviewed. Roughly 45 percent of those surveyed lived in a household where someone had lost their job or seen their hours of work cut or been put on unpaid leave. A similar proportion of respondents experienced a reduction in household income,” showed the analysis.

The impacts varied across different socio-economic groups, with the less well-off, less educated, and women among the hardest hit, wrote the experts, stressing that the perceptions about the future were also pessimistic, “with approximately a third of survey respondents saying they will not be able to make ends meet in the next month.”

“Both BiH entities introduced policy measures to protect firms and households, such as subsidizing minimum wages and social security contributions in companies affected by the COVID-19 crisis. These response measures may have somewhat alleviated the impacts of the initial shock; however, since data on the evolution of incomes and consumption are not being collected, their overall mitigating effect on poverty is not well known. And despite being highly informative, the types of online surveys we have implemented can hardly be considered a substitute for official poverty estimates, as the surveys are likely to be biased and not representative of the entire population of a country. While it would be difficult to field face-to-face surveys during the pandemic, the availability of more recent poverty data than 2015 would have made our simulations more accurate,” said the report.

The World Bank's experts concluded that the lack of official poverty data since 2015 may be affecting the country’s ability to design effective policies and assessing the impacts of its social programs.

“To be effective, political discussions and policy decisions must be based on solid, widely accepted data and objective facts. Without data, beliefs, not facts, drive people’s and policy makers’ decisions, affecting countries’ ability to design effective policies and, ultimately, their ability to grow and prosper. Making surveys widely available also allows more people to look at problems from different angles and propose creative and innovative solutions to complex policy challenges,” said Rigolini and Lucchetti.

“This crisis has illustrated the need for BiH authorities to take decisive actions towards adopting transparent data policies, fielding regular surveys to monitor the pulse of the country and making the information publicly available in a timely manner. Only in this way it will be possible to identify proactively the issues that are affecting the population the most, design policies and actions that are tailored to the specific issues that need to be addressed and verify that those actions achieve the results expected. In absence of reliable and timely data, we are flying blind through the current storm and will have fewer ability to avert future ones,” they added.

Source:  http://ba.n1info.com/English/NEWS/a479328/World-Bank-Covid-19-pandemic-wreaking-havoc-on-Bosnia-s-economy.html

IMF revises expected drop in Serbia's GDP

October 16, 2020

International Monetary Fund (IMF) mission chief Jan Kees Martijn said in a press release on Friday that Serbia's GDP will record a drop of 1.5 percent this year and will see growth of five percent in 2021.

The press release said that economic activity rebounded following a sharp contraction in the second quarter of 2020 caused by the COVID-19 pandemic with monetary and financial measures and a large fiscal package playing a key role in supporting the economy.

"Real GDP growth is now projected to contract by 1.5 percent in 2020 and rebound to 5 percent in 2021," it said, adding that the revised prediction is based on recent data showing a faster recovery than anticipated.Martijn warned that the outlook remains highly uncertain, reflecting the unpredictable course of the pandemic and related economic disruptions in Serbia and its trading partners.

Inflation has remained low and is expected to stay within the lower half of the NBS inflation target range in 2021. The banking system has remained stable, liquid and well capitalized, he said and added that tax revenues have been stronger than expected.

"The overall fiscal deficit is projected to be less than 9 percent of the GDP in 2020, with public debt staying below 60 percent of GDP," he said. He said that the mission agreed with the authorities on the key parameters of the 2021 budget.

“After some delays due to the pandemic, the implementation of structural reforms needs to be accelerated to secure strong and stable growth in the medium term. Ongoing efforts are needed to strengthen the tax administration, public investment management, and the monitoring and management of fiscal risks. Reforms of public sector wage and employment frameworks, which have faced substantial delays, should be completed. Enhancing the corporate governance of public enterprises, including EPS, and developing Serbia’s capital market remain vital," the press release said.

Source:  http://rs.n1info.com/English/NEWS/a661589/IMF-revises-expected-drop-in-Serbia-s-GDP.html

More than two million Serbians living in poverty, Unions say

October 16, 2020

More than two million Serbians live in poverty, the Association of Free and Independent Unions warned on Friday.

A press release for the International Day for the Eradication of Poverty specified that 2.2 million people are poor in Serbia. It said that the division of social wealth was unjust, bordering on robbery for the benefit of a small number of people impoverishing most of the population.

The Association said that those 2.2 million people have income below the poverty threshold. “It’s hardest for families with three or more children because 51.9 percent of them live in poverty and 41.6 percent of single parents live in poverty. Add to that some 350,000 workers whose families live on minimum wage and 1,650,000 others whose income is below the national average and we get a realistic image of how people in Serbia live,” the Association said.

Source:  http://rs.n1info.com/English/NEWS/a661541/More-than-two-million-Serbians-living-in-poverty-Unions-say.html

Serbian central bank officials sued over loan processing charges

October 16, 2020

The Efektiva Association of Bank Clients said on Friday that it had filed criminal charges against officials at the National Bank of Serbia (NBS) who failed to prevent banks from charging clients to process loans despite the Supreme Court ruling.

The Serbian Supreme Court ruled that banks can’t charge clients to process loans unless they inform the client about every individual expense.  

Efektiva said that it filed charges against NBS Governor Jorgovanka Tabakovic and her vice-governor for “abuse of official position and failure to perform official duties which allowed banks financial gain at the expense of the citizens of Serbia”.

A statement said that the NBS failed to prevent banks from charging clients illegally and its top officials openly sided with banks and consciously deceiving the public by stating that banks have the right to charge for loan processing and only quoting the part of the court ruling that benefits banks.

It recalled that the Supreme Court ruled on the issue more than two years ago. “No bank has shown in any of several thousand law suits what the costs are nor why they are linked to the loan amounts. Several hundred court rulings have been made in favor of the clients,” the statement said.

Source:  http://rs.n1info.com/English/NEWS/a661393/Serbian-central-bank-officials-sued-over-loan-processing-charges.html

Risk of poverty high, Serbian Statistics Office says

October 15, 2020

The at risk of poverty rate stood at 23.2 percent in Serbia in 2019 and was 1.1 percent lowered compared to 2018 and the risk of social exclusion was 31.7 percent or 2.6 percent lower than in 2018, the Republic Statistics Office (RZS) said on Thursday.

The at risk of poverty rate is the percentage of people whose available income is below the at risk of poverty level. In Serbia that meant an income of 19,381 Dinars (1 Euro – 118 Dinars) a month in 2019 for a household of one.

The threshold for a family of two adults and one child up to the age of 14 was 34,886 Dinars and for a family of four with two children up to the age of 14 was 40,700 Dinars.  

The at risk of social exclusion rate is the percentage of people at risk of poverty or with extremely bad material situations or living households with low labor intensity.   Viewed by age, young people under the age of 18 were most at risk of poverty (28.9 percent) as were people aged 18 to 24 (25.6 percent) while the lowest rate was among people over the age of 65 (21.1 percent).  

Viewed by household, the group most at risk (51.9 percent) were families with two adults and three or more children and single-parent families with one or more children (41.6 percent).  

The most at risk were the unemployed (47.5 percent) and the lowest risk was among people employed by others (6.5 percent). Among the self-employed the rate stood at 25.9 percent and among pensioners at 17.2 percent.  


IMF: Bosnia's economy to shrink 6.5 percent in 2020

October 14, 2020

Bosnia's DGP is expected to drop 6.5 percent in 2020, as a result of the coronavirus pandemic, the International Monetary Fund (IMF) said in its revised estimates for the region, meaning the country's economy will shrink even further compared to April estimates of only 5 percent.

The country's economy will likely pick up in 2021 by a modest 5 percent, which is also a revised number compared to April's Economic Outlook Report when they said the economy will gry by 3.5 percent.

The Fund added that they expect the country's economy to grow at the rate of 3.5 percent 2025.

The Report also claims consumer prices will drop 0.8 percent in 2020, compared to 0.7 percent from April estimates.

Inflation forecasts stand at 0.4 percent and the country's current account deficit is expected to rise to 4.4 percent of GDP this year.

Currently, the gap is expected to widen to 6.1 percent of next year's GDP, before narrowing to 3.8 percent in 2025, the IMF said.

According to them, Montenegro's GDP will shrink by 12 percent (three percent more than the previous estimate), Croatia's by nine percent (unchanged estimate), Albania and Kosovo's by 7.5 percent each (2.5 percent more than the previous estimate), the North Macedonian by 5.4 percent (1.4 percent more than the previous estimate) and Serbia's by 2.5 percent (0.5 percent more than the previous estimate).

Source:  http://ba.n1info.com/English/NEWS/a478524/IMF-Bosnia-s-economy-to-shrink-6.5-percent-in-2020.html

Daily says biggest infrastructure projects going to foreign companies

October 12, 2020

Belgrade daily Danas said on Monday that the biggest and most expensive projects in the country have been awarded to foreign companies and are being financed with loans from their respective countries.

Prime Minister Designate Ana Brnabic told Chinese Politburo member Yang Jiechi that thousands of jobs were saved and thousands more opened thanks to the Chinese companies investing in Serbia.

 It said that the government has taken some five billion Euro in loans from foreign banks to build roads, railways and other infrastructure without tenders to choose the best company to complete those projects. “That casts a huge shadow on the claim that Serbia is a big construction site because the population will spend years paying off the loans of almost five billion Euro for the 10 biggest projects,” it said and added that the authorities have announced more big projects and know who will do them and which banks will give the loans.  

The daily said that the government took 2.42 billion Euro in loans for highways and major roads of a total length of 330 kilometers.  

Source:  http://rs.n1info.com/English/NEWS/a659778/Daily-says-biggest-infrastructure-projects-going-to-foreign-companies.html

Serbian central bank says reserves at 13 billion Euro

October 9, 2020

The National Bank of Serbia (NBS) said on Friday that its gross hard currency reserves totaled 13.03 billion Euro in September or 338.8 million Euro less than a month earlier.

The net hard currency reserves stood at 10.78 billion Euro, it said and added that the reserves were reduced mainly because of the repayment of 212 million Euro and NBS sales of 150 million Euro on the domestic FX market to secure financial stability and ease the effects of the coronavirus pandemic.  

The level of hard currency trade on the inter-banking market in September stood at 410.4 million Euro or 48 million Euro less than a month earlier. A total of 4.82 billion Euro in trade was realized in the first nine months of the year.

The NBS said that the value of the Dinar against the Euro remained unchanged in September. The NBS sold 120 million Euro on the FX market in September, brining the total sales since the start of the year to 1.635 billion Euro.

Source:  http://rs.n1info.com/English/NEWS/a658934/Serbian-central-bank-says-reserves-at-13-billion-Euro.html

FIAT Chrysler Automobiles Serbia sends production staff on leave again

October 9, 2020

The FIAT Chrysler plant in Kragujevac shut down its production line and sent employees on paid leave after working for just three days, the Beta news agency reported quoting the head of the plant union.

Plant employees will remain on leave up to October 20 when produciton of the FIAT 500 L is set to resume. Nezavisnost Union leader Zoran Stanic said that the paid leave was announced on Thursday with no explanation given. He said that administrative staff will continue working as normal and added that they are getting their full salary while the staff on leave get 65 percent.  

The FIAT Chrysler Automobiles plant resumed production on October 6 to 8 after bringing production line staff back from leave which began on September 18. The plant has closed down and resumed production several times since the coronavirus pandemic broke out.

Source:  http://rs.n1info.com/English/NEWS/a658900/FIAT-Chrysler-Automobiles-Serbia-sends-production-staff-on-leave-again.html

Serbian FinMin says budget deficit almost 350 billion Dinars

October 7, 2020

The Serbian Finance Ministry said on Wednesday that the budget deficit in the first eight months of the year totaled 344.6 billion Dinars or about 2,95 bln Euro(1 Euro – 117 Dinars).

The deficit in August alone stood at 20.9 billion Dinars with collected income totaling 97.7 billion, including 89.7 billion in tax revenue. VAT income totaled 42.6 billion Dinars, profit tax 18.9 billion and duties 18.2 billion. Non-tax budget income totaled 7.5 billion Dinars while donations totaled 0.5 billion.

Expenses reached the level of 118.6 billion Dinars with the pension, health and other funds receiving 25.5 billion Dinars, subsidies totaling 24.8 billion and expenses for employees 24.8 billion.

The overall state fiscal deficit totaled 339.9 billion Dinars in the first eight months of 2020 while the primary fiscal deficit stood at 263.9 billion. The public debt stood at 26.61 billlion Euro at the end of August or 56.7 percent of the GDP for the year. The public debt stood at 23 billion Euro or 52 percent of the GDP at the end of 2019.    

Source:  http://rs.n1info.com/English/NEWS/a658099/Serbian-FinMin-says-budget-deficit-almost-350-billion-Dinars.html

MAT: Serbia’s industrial production drops

October 6, 2020

The latest issue of the Macroeconomic Analyses and Trends (MAT) newsletter said that industrial production in Serbia dropped 0.7 percent y.o.y. between January and September.

Electricity production dropped by 2.6 percent in that eight month period while the mining industry reported an output higher by 3.2 percent. MAT said that foreign trade data indicate a recovery but at a much slower pace than industrial production. “The problem with economic recovery is less about production and more about the speed of recovery of our export destinations,” the newsletter said.

Net foreign direct investments in the January-July period stood at around 1.57 billion Euro which is 651.2 million Euro or 29.4 percent less than in the same period of 2019, it said and added that portfolio investments totaled some 1.42 billion Euro and were 1.12 billion higher than in the same period a year earlier.

The net outflow of other investments (cash and deposits, financial and trade loans) stood at 987.7 million Euro compared to 657.9 million a year earlier. MAT noted an increase in deposits by business banks abroad of 338.1 million Euro as well as net loans taken by business banks of 450.6 million Euro and companies of 273.5 million Euro while the state’s net debts were reduced by 47.3 million Euro.

Source:  http://rs.n1info.com/English/NEWS/a657717/MAT-Serbia-s-industrial-production-drops.html

EC economic and investment plan for Western Balkans

October 6, 2020

The European Commission on Tuesday presented a nine billion Euro economic and investment plan for the Western Balkans which is intended to help the region move forward on its path to the Union and forge closer links between its economies.

According to the plan which N1 had access to, six of the nine million Euro will be directed towards the transport, energy, digitalization, agriculture, health care and education sectors in all the countries of the region. Another 1.5 billion is earmarked for the private sector and the remaining 1.5 billion for education.  

The Commission said that the coronavirus pandemic had a massive disruptive effect on the economies of the region whichwere already lagging behind in terms of economic convergence with the EU and added that the plan was intended to spur long-term recovery which would lead to sustained economic growth.  

It said that the countries of the region had to implement reforms in order to move forward and draw closer to the EU Single Market. The plan is intended to unleash the untapped economic potential of the region and the significant scope for increased intra-regional economic cooperation and trade.  

The Commission said that it would mobilise up to nine billion Euro from IPA funds for the 2021-2027 period to support economic convergence with the EU primarily through investments and support to competitiveness and inclusive growth, sustainable connectivity, and the twin green and digital transition. It added that a new Western Balkans Guarantee facility should be put in place which could potentially raise investments of up to EUR 20 billion.  

“There is much we agree with in today’s package for the Western Balkans, including the lack of progress on tackling corruption and the need for investments in sustainable renewable energy and a circular economy. But the European Commission’s blatant lobbying to expand fossil gas use in the region is utterly unacceptable and in conflict with the EU’s own 2050 decarbonisation goals”, said Ioana Ciuta, Energy Coordinator for CEE Bankwatch Network. “The predominance of hydropower in the flagship renewable energy projects is also worrying, given its environmental impacts and climate vulnerability”, added Pippa Gallop, Bankwatch’s Southeast Europe Energy Advisor. “The region needs support to concentrate on energy savings, solar and appropriately-sited wind, not to be further distracted by 20th Century technologies.”

According to the commission, better links between the economies of the region are a priority which requires a strong commitment from the to implementing fundamental reforms, deepening regional economic integration and developing a common regional market on the basis of the EU acquis. The priorities also include waste water management and moving from coal-based to renewable energy.  

The commission warned of poor governance and limited progress in dealing with shortcomings in rule of law and the fight against corruption. It said that regional and cooperation with the EU are essential in addressing fraud, corruption, money laundering, terrorism, extremism, trafficking in arms and people and smuggling migrants.

Source:  http://rs.n1info.com/English/NEWS/a657673/EC-economic-and-investment-plan-for-Western-Balkans.html

Most Serbian pensioners get 200 Euro a month

October 2, 2020

The head of a pensioners’ organization said on Friday that a million pensioners in Serbia get less than 25,000 Dinars a month (1 Euro – 118 Dinars).

Pensioners’ Alliance President Andreja Savic said that the average monthly pension in Serbia is 27,769 Dinars. Speaking to the UGS Nezavisnost Union portal, Savic said that there are 1.7 million pensioners in Serbia out of a population of less than seven million.  

He said that the state pension fund had not been managed properly in the past with fund money used for various projects and investments, adding that the monthly pension payments have become a serious burden for the government because they amount to between 9.5 and 11 percent of the GDP or between 4.5 and 5 billion Euro a year.  

Savic, a former chief of the country’s top civilian security and intelligence agence (BIA) said that his organization feels that the average pension should not be less than half of the average salary which now stands at some 60,000 Dinars.  

Source:  http://rs.n1info.com/English/NEWS/a656346/Most-Serbian-pensioners-get-200-Euro-a-month.html

Serbian court fines Zijin Copper for pollution

October 2, 2020

The Center for Investigative Journalism of Serbia (CINS) reported on Friday that the Zijin Bor Copper company and one of its managers have been sentenced to pay a fine of 450,000 Dinars (1 Euro - 118 Dinars) for air pollution.

The Economic Court in Zajecar ruled in July that the company and the manager of its Copper Smelting and Refining plant Boban Todorovic were guilty of violating the law by allowing the plant to release excessive levels of sulphur-dioxide (SO2) into the air in the town of Bor on four occasions in November 2019 and January 2020, CINS said adding that the levels of SO2 were more than eight times higher than permitted by law according to the Environment Ministry which launched the court proceedings.  

Both Zijin Bor Copper and Todorovic have the right to appeal the ruling as does the prosecution with a final ruling to be taken by the Economic Appeals Court in Belgrade where the case was sent on September 21. Prosecutors are demanding higher fines while the company lawyers want the ruling overturned.  

CINS said that Zijin could have been fined up to three million Dinars but the court said that it had considered mitigating circumstances: the company showed social responsibility and is investing effort to reduce the pollution and the equipment is outdated.  

Source:  http://rs.n1info.com/English/NEWS/a656222/Serbian-court-fines-Zijin-Copper-for-pollution.html

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