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Macro-Stabilisation Issues in the Serbian Economy: Methodological Evaluation

In this paper we analyse the macroeconomic stabilisation of Serbia over the last five years, by calculating an Index of Macroeconomic Stabilisation derived from the pentagon of stability. The pentagon is constructed through five indicators of stability: Real GDP growth, unemployment, inflation, budget deficit and foreign debt. On the basis of this methodological approach, we conclude that Serbia is confronted with serious imbalances in the economy, in particular with respect to unemployment and foreign debt. Within a regional context of Balkans, the country records the lowest degree of stability at macroeconomic level. The projections of main macroeconomic indicators show that in the coming years the situation will not improve significantly. The main reason for such a low stability resides in the insufficient coordination of main macroeconomic policies; these policies are often approached in an isolated manner, without a clear perspective for the medium and long term, and on a curative principle rather than on preventive basis.