Debate on the efficiency of the “gift” (100 euros) the government gave to all full-of-age citizens before the elections, is still going on. Having in mind that the national GDP might contract by 3% this year and army of unemployed increased by new 30,000 to 50,000 members, its rationality is really controversial. “For the realization of a measure which did not seriously contribute to the solution of any social problem, the government spent a sum equaling the per year investment in the health system, says a member of the Fiscal Council, Petrovic. The situation has been additionally aggravated by a rather big public debt, amounting to 57% of the GDP, which makes further borrowing – necessary for the second phase of economic assistance to small and medium enterprises – more difficult”.
Petrovic is convinced that in autumn Serbia will be facing a recession. Economic activity will slow down, many will lose their jobs and wages in some sectors will go down. However, segments of economy will be affected differently: while many manufacturing sectors, tourism, catering and services in general will suffer considerable losses, the agriculture, food-processing and communications will keep their pace or have a negligible decrease. In contrast to the 2009 crisis, the exchange rate of the national currency and inflation rate is supposed to remain stable.
For assisting the SMEs and citizens 2.5 billion euros have been spent so far. As 30% of companies did not show interest in the assistance, the government got abundant additional means for economic and social purposes. Still, no changes were introduced into the first-phase assistance program, which treated all companies equally and was criticized unselective. This will negatively affect its efficiency and limit the possibility of significant investments in health sector which is confronted with the second wave of the pandemic. The cost of the above-mentioned “gift” is now becoming obvious: 600 million euros paid to the population could have been used to finance a year of social assistance for 500,000 people in need or cover cost of 200,000 unemployment benefits! Or – coming back to the beginning – increase the investment in health system five times!
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