In which amount and way will the new geopolitical and geoeconomic rearrangement due to the crisis in Ukraine affect the fragile economy of Bosnia and Herzegovina (BiH) and rising prices are questions that are being asked these days by economic experts, but also by citizens. There is room for optimism if we keep in mind that our economy did well during the pandemic, but also the fact that BiH annually exports goods worth about 117 million marks to the markets of Russia and Ukraine, mostly pharmaceutical products. Changing the VAT rate or interfering with fiscal and monetary policy at this time in BiH is not recommended, experts warn. Unfortunately, price growth is inevitable.
There is no doubt that the Russian military intervention in Ukraine will, in addition to political ones, cause great upheavals in traffic and the economy of Europe, but also the world. What awaits the economy of BiH?
“I believe that in the direct sense, it will not affect BiH much. It is about 9.6 million that we export to Ukraine and about 107 million that we export to Russia. We mainly export pharmaceutical products worth 81 million to Russia, ” statedAhmet Egrlic, President of the Foreign Trade Chamber of BiH.
Even though imports are also growing, ten years ago BiH recorded exports of 7.8 billion BAM. Today it exceeds 13 billion. Unfortunately, export growth is not the result of a global export strategy.
“This is exclusively due to the companies that are in these global chains of suppliers in the metal and electrical industry, automotive industry, furniture industry… The increase in exports compared to last year is over 30 percent,” stressed Mirsad Jasarspahic, president of the FBiH Chamber of Commerce.
Out of 13 billion BAM of exports, BiH places as much as 72 percent on the European Union (EU) market.
“There will certainly be an increase in prices and a disruption of the global supply system, and we can really expect consequences in terms of rising prices,” Egrlic added.
“In our country, bread rolls will also be invoiced as bread in order to pay a lower rate. In such conditions, experimenting with fiscal and monetary policy or reaching for price restrictions, and not having commodity reserves, is really insane and leads to adisaster, ” warned economic analyst Svetlana Cenic.
And there are no commodity reserves. After they were destroyed in the Republika Srpska (RS), 800 million BAM are being demanded from this entity from the Central Bank of BiH for the formation of new commodity reserves.
“He wants the Currency Board to be broken, which would be a disaster for BiH. So, then we could all buy one piece of rope and hang ourselves because the only thing that people here believe in is that currency, the stability of the currency, ” emphasized Cenic.
Either way, prices will rise. It will be increasingly difficult for citizens, businessmen will, as before, look for new ways of doing business in the current situation, and politicians will continue to either work for others or use populist proposals, instead of a quality strategy, to dedicate everything to new elections and new seats.
E.Dz.
Source: Federalna
