Although today much more integrated in global production and trade chains, Serbia – owing to the responsible conduct of economic policy in the past period and coordinated and timely measures of the NBS and the Government – managed to minimise the economic fallout from the pandemic.
It might be easier to understand if you consider a case in which you have a mortgage. As the amount to be repaid is fixed while wages and real estate prices decline due to deflation, you feel the debt service burden gradually increase.