On Monday June 4th, president Aleksandar Vucic got angry when someone on some television said that the salary level and growth should be compared with prices, i.e. inflation. The president said it would be pointless and returned to his favorite calculation of salaries in euros. To be honest, it can’t be said that this calculation is irrelevant: it makes it possible to compare salaries in different countries, but more important is what and how much an average salary or pension can buy in a given country. And when it comes to this, it’s quite possible to imagine a situation in which your salary in euros is increasing, while the amount of things you can buy for it decreases. Moreover, this often happens in practice. And not in some distant African country, but in the one we live in, in Serbia.
Recently, economists Milojko Arsic and Nemanja Vuksanovic published an analysis of salaries during the period from 2001 to 2017. I want to emphasize this, so that Vucic won’t be able to accuse an “American television” (N1) or some “so-called analysts” of misinforming the public. So, in the aforementioned period, Arsic and Vuksanovic calculated that the average net salary in Serbia increased eightfold – from 5,840 to 47,893 dinars. However, when the price increase in the same period is included in the calculation, the salary increase drastically changes and we see that the real average net salary has merely doubled in the last 17 years. The salaries in euros, however, more than quadrupled: from about 99 euros in 2001 to just over 404 euros last year. So, salaries in euros increased more than two times more compared to salaries in dinars in actual terms.
Just to make one thing clear, this is not a result of some conspiracy or incompetence of the Democrats. A similar thing, only worse, continued to happen in the last 5-6 years, during Vucic’s reign. The average net salary in Serbia increased from 41,377 dinars in 2012 to the aforementioned 47,893 dinars last year. The salary in euros has also increased, not as much as in dinars, but by 10%, from 363.86 to 404.21 euros, which is not nothing. However, if the increase in prices is taken into account, the actual average salary in 2017 was actually lower than in 2012.
And finally, let’s look at last year alone. Last year, the average salary in euros, compared to the previous year, increased by 30.87 euros or 8.3 percent. The salary in the “national currency”, however, rose by 1,796 dinars or about 4 percent. But when inflation of 3% from last year is taken into account, the real salary in 2017 was 0.9% higher than in 2016. In other words, the salary in euros has increased twice as much as the salary in dinars nominally, and as much as 9 times more than the salary in dinars in real terms.
The conclusion is clear and unambiguous. The average salary in euros in Serbia grew from 2012 to 2017, but when it comes to its purchasing power, whether in dinars or euros, in real terms, it has decreased. It is reasonable to assume that the citizens care about what is really happening and not about the things that should have happened or that sound nice.
And finally, to answer the question from the title. The citizens of Serbia pay president Aleksandar Vucic’s salary. But his job is to tell them the truth, and not to lie to them.
Translated by Marijana Simic