Economists: New LOCKDOWNS require new AID PACKAGES

The new tightening of epidemiological measures due to the outbreak of the coronavirus pandemic will require new measures of financial support to the most affected branches of the economy, as businessmen and economists estimated.

Slobodan Djinovic, a member of the Presidency of the Union of Employers of Serbia, has told the Beta agency that in a situation when protective measures against the infection are not observed, due to which the pandemic is spreading, there will probably be no other solution to the economic crisis than a new „liquidity pumping“.

„Companies still have obligations based on taxes and contributions from last year, but now obligations from the current year are due to be paid, and banks are restrictive in approving loans, so the economy is in big trouble because it needs funds with a longer repayment period. That is why the state should ‘pump’ them in, regardless of the fact that it has to borrow money,“ said Djinovic.

He added that „the whole world is getting into debts“ because of the crisis and that for the state of Serbia, at the moment, the priority should be for companies to survive.

He said that there was fear that due to the bad situation in the economy, the labour force would „escape“, so due to the reduced supply, the pressure to increase wages will increase.

(Un)selective assistance is (un)justified

Chief economist of the Fiscal Council, Danko Brcerevic, has noted that the state should continue to help affected companies.

„It is rational to help those affected by the crisis, because that will return through taxes and contributions, so we should be careful and help only those companies that have a sustainable business model, but have encountered financial problems due to the crisis,“ said Brcerevic.

Assistance to temporarily affected companies is economically rational long term, because if the crisis extinguishes too many companies „it will cost us more in the future through lost future taxes, contributions and economic growth“.

Izvor: Beta

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