Investments must be key driver of GDP growth - economists

The announced modification of the so-called Swiss pension formula in Serbia can be understood as a government intent to boost consumption and the multipliers of economic development, says Dragan Djuricin, professor at the Belgrade Faculty of Economics and a member of the Kopaonik Business Forum Programming Committee.

26 Februar 2020 12:23

BELGRADE - The announced modification of the so-called Swiss pension formula in Serbia can be understood as a government intent to boost consumption and the multipliers of economic development, says Dragan Djuricin, professor at the Belgrade Faculty of Economics and a member of the Kopaonik Business Forum Programming Committee.

"All that is possible if there is real fiscal space," Djuricin said Tuesday, adding that long-term development requires investments.

Serbian Association of Economists Aleksandar Vlahovic agrees, adding that investments should be the key driver of GDP growth.

"The pace of growth of public sector wages and the accompanying pensions should be on par with the pace of GDP growth, and the higher the GDP growth rate, the higher the rates of wage growth and consumption will be," he said.

There is a need to become more focused on investments and to make them the driver of GDP growth, he said.

Under the Swiss formula - in place in Serbia as of January 1 - pensions are aligned with inflation growth and the average wage.

However, Finance Minister Sinisa Mali has announced the formula would be modified to maximise pensions.

Photo: Tanjug/D. Kujundzic

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