03/06/2021

Governor Tabaković speaks to Constituency about Serbia’s strong pandemic response and maintained stability

Governor Tabaković said today at a seminar organised by the Swiss Constituency, of which Serbia is a member, that owing to everything that has been done in the past nine years and our strong response during the pandemic, we have preserved the labour market, stability and the foundations for long-term growth. The theme of the seminar organised by the Swiss Constituency of the IMF and World Bank was “Overcoming the Pandemic and Enabling Sustainable Recovery”.

When asked how Serbia managed to cope with the economic fallout from the pandemic so well, the Governor answered that the reasons are numerous and that Serbia entered the crisis in an excellent macroeconomic shape, because a lot has been done over the past nine years.

“Here I want to give the deserved credit to our President Aleksandar Vučić for his vision and dedicated work for a stronger Serbia. We implemented large and comprehensive monetary and fiscal packages, while keeping public debt to GDP ratio under control and strengthening our FX reserves even during the pandemic”, said the Governor. She underlined that the economic consequences of the pandemic were also managed well thanks to the timely adoption of the measures that helped preserve business and consumer confidence, as well as thanks to the product and geographical diversification of industrial production and exports, the continuation of all infrastructure projects in the country, and the successful vaccination process.     
 
Recalling that Serbia entered the pandemic-induced crisis in a much better shape than the crisis of 2008, the Governor pointed out several results achieved during the past nine years. “We have kept inflation under control for more than seven years now, we have built a strong fiscal position, strengthened the country’s external position, increased FX reserves and resolved the legacy of NPLs. I have cited only several results because one of the conclusions at the global level is that countries that had built good fundamentals before the crisis were in a better position to react strongly and swiftly by large and timely programmes of support for people and businesses”, said Governor Tabaković.

With a view to supporting households and businesses, the NBS responded timely and strongly, using a large number of instruments. As a result, good access to finance and favourable financing conditions for the government, banks and the private sector have been preserved. The NBS was among the first to introduce a moratorium on liabilities under loans and loan-like products, and by means of different measures it facilitated still further the access of households to financing, especially to housing loans. The NBS also maintained the relative stability of the exchange rate of the dinar against the euro, as one of the key pillars of Serbia’s overall macroeconomic stability. “On top of this, our communication was clear – to shocks of temporary nature we respond by temporary measures”, said the Governor.

The Government responded with three large packages. That all the measures were timely and well-calibrated is confirmed by the fact that, after strong negative effects of the pandemic on our economy in March and April last year, the recovery began already in May and in many sectors it was V-shaped, including retail trade, industrial production and commodity exports. Employment and wages in the private sector increased during the pandemic, which was one of the key objectives of all the measures taken.

“Our GDP exceeded the pre-crisis level already in Q1 this year, which means that Serbia reached pre-crisis levels of economic activity before many other world economies. With everything we did, we have preserved the basis for Serbia’s strong and sustainable growth going forward. Macroeconomic stability is the key priority and, as in Serbia we have kept it, we can now go further with the reform agenda“, concluded Governor Tabaković.

The Governor’s address in full is available here.

 

Governor's Office