Last year's gross domestic product (GDP) growth of 5,1 percent did not contribute to any increase in living standards, because the symbolic increase in wages and pensions was lower than the increase in inflation.
The average salary in 2018 was 511 euros, only one euro or 0,19 percent higher than the year before. The average pension at the end of last year was 283,8 euros, i.e. 4,2 euros or 1,5 percent higher than in 2017.
Last year's inflation rate was 2,6 percent, which means that in a year of significant economic growth, salaries in real terms fell by 2,4 percent, and pensions by 1,1 percent.
At the beginning of last year, when Prime Minister Duško Marković boasted about growth in 2017, the same situation occurred that citizens' incomes had a drop in real value. Then he said that in two years it will be better because economic growth will affect that in 2020 its benefits will also be felt by the citizens.
"During 2020, we expect a surplus in the budget, and thus space for further debt repayment, which will create funds for new development projects that will bring economic growth and a better standard to citizens. To enter a budget surplus in 2020, and reduce the public debt to 60 percent of GDP. I believe that salaries and pensions will be higher then, and that the standard of living will be significantly higher than today," said the Prime Minister a year and nine months ago.
GDP is rising...
The greatest influence on this GDP growth in 2018 was in the area of electricity supply, where growth, thanks to higher rainfall, was 68 percent compared to the dry 2017. Construction had a growth of 10 percent, and manufacturing industry 12 percent, but at a lower rate. volume. Tourism had a growth of 6,6 percent, agriculture by 6,5, trade by 5,4...
In order to maintain economic growth in the coming years, which should finally be felt by the citizens, it must be maintained in these areas, which will be a big challenge.
Electricity production will continue to depend mostly on the amount of rain, which the Government cannot influence. The manufacturing industry is partly in trouble due to the drop in the price of steel and aluminum on the world market and the reduction of needs due to the decline in car production and construction in EU countries. With tourism, one could expect a continuation of official growth, but it is the "most timid" economy because it depends on many factors. The bankruptcy of the oldest tour operator, as well as some airlines, shows possible negative trends. There is also the announcement of a possible economic crisis, fueled by negative or barely above zero growth rates in Italy, Germany and France. Tourism also depends on what the situation will be like in the competitive markets of Croatia, Greece, Turkey, Egypt..., whether there will be strikes, terrorist attacks, coups d'état before the season...
Guidelines
The growth in construction was most significantly influenced by the large volume of work on the highway. However, it ends in September of the following year, and until then the value of the works will gradually decrease. In the macroeconomic and fiscal policy guidelines for the period from 2019 to 2022, adopted on August 1 of this year, the Government states that the reduction in the volume of investments is the greatest danger to the reduction of growth and that ways should be found to continue them.
"Changes in the dynamics and scope of works on investment projects can negatively affect medium-term macroeconomic and fiscal projections," it was stated in the guidelines.
The government expects that spending on the highway, necessary for continued growth, will replace private investments encouraged on the basis of economic citizenship, airport modernization and other announced investments.
"Average real investment growth is projected at the level of 1,2%, with an expected real decline of 3,4% and 2,0% respectively in 2021 and 2022, due to the base effect - the completion of the highway section," the guidelines state.
Therefore, a lot is "at stake", so that in a few months, the increase in standards, which was announced by the Prime Minister at the beginning of 2018, will begin to be felt.
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