Is a better living standard implied by wage increase?

The Statistical Office of the Republic of Serbia (RZS) reports that the average gross salary for September 2024 was 132,783 dinars, while the average net salary (after taxes and contributions) reached 96,115 dinars. The median net salary (75,117 dinars) is earned by half of the employees in Serbia.
Gross and net salaries in January-September 2024 grew by 14.5% nominally and 9.3% in real terms, compared to the same period last year. The increase of the average gross and net salaries for September 2024 was 13.0% nominally and 8.4% in real terms compared to the same month in the previous year.
Traditionally, they recorded the highest net salaries in the Belgrade region, particularly in the municipalities of Stari Grad and Vračar (170,558 and 163,757 dinars). Savski Venac (158,414 dinars) and Novi Beograd (155,034 dinars) were the following.
Jablanica District had the lowest average salaries in Serbia (71,652 dinars), particularly in Bojnik (63,622 dinars), while Medveđa had the highest salaries in the district (76,929 dinars).
According to Professor Ljubodrag Savić from the Faculty of Economics in Belgrade, there are several factors contributing to income disparities in Serbia.
The first one is the location of the most significant company offices in Belgrade (foreign companies, trade firms, consultancy agencies, universities, government institutions, and public sector organizations such as Elektroprivreda Srbije). Nevertheless, there is income inequality even in Belgrade itself.
Savić explained the lowest reported salary in Bojnik (63,622 dinars) by Serbia’s population decline. Nevertheless, living costs in these regions are significantly lower than in areas like Stari Grad, Belgrade.
The income earned by 50% of Serbia’s workforce is reflected by the median salary of 75,117 dinars (approximately €700). According to Savić, this amount might not seem small in euros, but the situation changes radically when you convert it into dinars and assess their purchasing power.
Savić explained that incomes seem to rise rapidly, especially expressed in euros, but inflation often outpaces salary growth in dinars, because the euro has remained at 117 dinars for the past 10–15 years. So, constant euro-denominated exchange rate makes the figure in euros appear larger, though living standards don’t necessarily improve.
The real impact of inflation on purchasing power pointed out by Savić can be revealed by looking back a decade.
He compared the purchasing power of €100 ten years ago when converted to 11,700 dinars with today’s one and found that the difference in value is stark, whether it’s sugar, milk, or other products.
According to him, this demonstrates that economic well-being is not always accurately indicated by the euro figure.

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