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2021, vol. 69, iss. 3-4, pp. 137-167
How we entered the crisis caused by the COVID-19 pandemic
National Bank of Serbia
Keywords: COVID-19; crisis; packages of measures; monetary policy; stability; confidence; recovery
The paper aims to point out the strength and effects of the shock of the crisis caused by the COVID-19 pandemic on the global and domestic economy. Effects differ depending on the characteristics of individual economies and the response of economic policy makers. The crisis called "the great lockdown" features: 1) suspension of activity in some sectors and huge declines in others, with pronounced asymmetry and 2) implementation of robust packages of monetary and fiscal policy measures. The paper focuses on the measures adopted in Serbia to mitigate the negative effects of the pandemic on the domestic economy. It elaborates on the temporary measures adopted by the National Bank of Serbia (NBS), which helped preserve stability in the foreign exchange market, ensured efficient functioning of the money market, liquidity support to all sectors and more favourable financing conditions, sustained credit activity and supported the domestic real sector. According to our estimate, if the monetary and fiscal policy measures had not been adopted, the fall in Serbia's economic activity in 2020 would have exceeded 6%, while growth in 2021 would be modest, failing to reach the pre-pandemic growth dynamics even in the medium term. The adoption and implementation of the robust package of measures was possible because Serbia faced the crisis in a good macroeconomic and fiscal position owing to the strengthened economy and implementation of structural reforms in the past period. In fact, Serbia can serve as the example of a country confirming the importance of strengthening the economy on sustainable grounds in the past eight years, which created room for the adoption of comprehensive economic measures to support citizens and businesses, in order to preserve production capacities and jobs.
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article language: English
document type: Invited Paper
DOI: 10.5937/EKOPRE2103137T
received: 16/01/2021
published in SCIndeks: 25/05/2021