Vucic's 1,200 Euro Salary Pledge Draws Skepticism
Vucic has promised an average salary of 1,200 euros by year's end, but employers and economists warn a 17 percent jump in six months has no basis in productivity or the budget.
The average net salary in Serbia is set to reach 140,850 dinars, or 1,200 euros, across the entire country by December. President Aleksandar Vucic made the announcement on September 11, but the first concrete responses from business and the economics profession came only today: the Serbian Employers Union and two economists say the math does not add up.
The announcement bundles three separate moves. Public sector salaries will rise 8 percent starting December 1, not January 1 as is customary. Workers in social welfare will get a 12 percent raise, pensions will rise 7.5 percent, and, according to Vucic, the average pension should climb above 520 euros. The net minimum wage would reach 600 euros for the first time starting January 1, 2027.
What Is the Current Salary, Really?
This is where the numbers get complicated, because the sources offer two different baselines for comparison. According to the Statistical Office of the Republic of Serbia, the June salary in the public sector was 124,218 dinars (1,058 euros), and outside the public sector 118,850 dinars (1,012 euros). That is the breakdown by sector. Separately, the overall average salary for the whole country ranged from 118,429 dinars (1,009 euros) in January to, according to the latest available data, 1,025 euros now. These two sets of figures measure different things, the sector split and the overall average, and should not be conflated, but both point to the same conclusion: reaching December’s 1,200 euros would require roughly a 17 percent jump in just six months, from June to December.
Vucic himself offered a third, much longer time frame when presenting the measures. By his account, the salary is rising from 331 euros to 1,200 euros, an increase of 4.1 to 4.2 times, and when inflation is factored in, the real growth comes to 71.59 percent. That comparison spans more than a decade, not the past six months, making it a fundamentally different calculation from the one economists are using to assess the current announcement.
What Employers Say
Nebojsa Atanackovic, an economist with the Serbian Employers Union, points out that the private sector cannot keep pace with the public sector, noting that the recent increase in the minimum wage from 65,000 to 70,000 dinars was already a burden for employers.
“According to the surveys conducted every year before a decision is made on the minimum price of labor, a large share of employers, 48 percent, told us they simply cannot accept an increase in the minimum wage, because they cannot raise their revenues while operating costs keep growing. Only part of the economy can absorb a new increase in costs,” Atanackovic told N1.
He adds that in most countries of Western Europe and the European Union, public sector wages lag behind the private sector, while in Serbia the situation is reversed.
“The economy cannot raise wages the way the public sector does, by a decision of the authorities. It can only do so through better business results. Wage growth should track productivity growth, not follow the principle that if the money is there, it can be spent. That may only be possible in the public sector,” Atanackovic said.
Economists: Fishing for Votes
Economist Bozo Draskovic believes the public sector budget cannot run on the principle that if the money is there, it can be spent, either. Political will, he says, delivers the money today, but the bill comes later.
“If there is political will, there will be money in the budget too. But this measure will have to be offset later, for instance next year it will have to be paid for by putting the brakes on wage growth,” Draskovic told N1.
According to him, neither inflation nor productivity growth, the two yardsticks normally used to adjust wages, can justify an increase of this size.
“This is fishing for votes. There is no officially published data that would show this percentage of wage growth is justified. We do not have precise inflation figures on which to base a wage correction. This is speculation the government is using to create a favorable political atmosphere ahead of the elections,” Draskovic said, warning that an economically unfounded increase could make inflation worse.
“Only at the end of 2026 will we have clear parameters,” Draskovic adds.
Economist Danilo Sukovic agrees that a roughly 17 percent increase in six months has no real economic basis and calls it part of pre-election marketing.
“The figures alone show this is unrealistic, and all of these are measures that are part of a pre-election package. For people, it means getting a pay raise around New Year’s and Christmas. The private sector, on the other hand, works differently. It is not in the business of political marketing, it is driven by profit,” Sukovic told N1.
The 2027 Minimum Wage Is Already Set
Unlike the December announcement, the minimum wage for 2027 went through the regular procedure before the president spoke about it. Negotiations between the social partners began on August 10, and since the government, unions and employers failed to reach an agreement, the Serbian government set the rate itself, as required by the Labor Law: 405 dinars per working hour, or about 70,470 dinars a month, a 9.2 percent increase over the current 371 dinars per hour. Unions had sought 650 euros, and employers accepted the government’s proposal. In euros, the new minimum wage comes to about 600 euros, the same figure Vucic cited for the net minimum wage starting in January 2027.
Srpske.rs reported Vucic’s initial announcement on September 11, with the same figures on salaries, pensions and the minimum wage. What is new today are the first reactions from business and the economics profession, and they do not match the announcement’s optimism: employers point to costs they cannot keep up with, and economists point to figures with no backing in official data.
