Deputy Prime Minister and Minister of Foreign and Internal Trade and Telecommunications Rasim Ljajić stated that the majority of retail chains in Serbia will not increase prices following the VAT increase from 8 to 10 percent.

This morning, we surveyed most of the large retail chains in Serbia, and they said that given the low purchasing power, the citizens’ living standard and the decline in retail sales, they are not planning to increase prices following the increase in VAT rate, said Ljajić.

He pointed out that the Ministry cannot influence the forming of prices on the market, nor the business and decisions of retailers, but that it will monitor the situation in the market.

He added that small retailers will use the higher VAT rate to increase prices in retail. However, some retailers stated that there will be no price increase, rather that they will lower the trade margins if producers announce a price increase.

The Minister announced that throughout January there will be several meetings with big retail chains in order to analyze the situation in the market and find the best solutions for improving the overall business environment.

If there is already a strong competition in the market, and the arrival of new retail chains is announced, this will mean a bigger offer and more affordable prices in the market, stated Ljajić.

The provision limiting the price of “Sava” bread made of T-500 flour, weighing 500 grams, to 46 RSD expires at the end of January, and according to Ljajić, the Ministry will monitor the situation in the market and make a final decision accordingly.

If there is an indication that there will be an increase in the price of the bread, then this provision will remain in place at least for another six months, because it is necessary to take into consideration the protection of the most vulnerable population.

When we are sure that there will not be an increase in bread price, then we can discuss annulling that provision which was criticized by the European Commission, noted Ljajić.