Former minister says interest rates reflect perceptions about economy

Serbia recently issued state bonds worth two billion Euro at an interest rate of 3.3 percent which economy experts said is very high.

“The question is the ability to repay the loans in the future. If we spend more than we should now, we will carry the debt over to future generations and risk a high percentage of the interest payments in budget expenses diminishing the capacity for long-term sustainable development,” the former Foreign Economic Relations Minister said.

He said that the current crisis differs to the 2008 crisis, adding that it’s hard to predict how long it will last and how deep it will be.

Pitic warned that the government should be cautious with its support and base decisions on expert recommendations.

He said that the payment of three months worth of minimum wage to employers was the measure with the most concrete effects. According to Pitic, a guarantees fund could help the economy.