QUARTERLY MONITOR of economic trends and policies in Serbia July-September 2005

"It's moving and picking up speed" may be said of Serbia's economy in the third quarter of 2005. The question must follow: is there a danger of it jumping off the tracks? Our answer is: not for the moment, but there are clear dangers ahead. Our worry is: is the engineman awake?

This time around, the inflation in Serbia is a product of good news. As is set out in the current QM issue, it is the result of rapid economic growth, the result, in turn, of increased exports and an influx of capital. We feel more confident of this than in our last issue because of our better knowledge of the what data to trust. However, a more stringent monetary policy and the gradual tightening of fiscal policies have not yet had results. What should be done?

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