High inflation caused a sharp jump in the prices of raw materials on the European market, which created problems for domestic, export-oriented companies.
In the Prijedor company “Lipa-drvo” they claim that from the beginning of 2021 they are facing a constant increase in inflation. They say that in the post-inflation period, global demand exceeded supply and that this contributed to the rise in prices at all levels.
“After the war in Ukraine, the resulting price of energy and still low interest rates contributed to a significant increase in inflation, up to 15 percent. Inflation created uncertainty and uncertainty in the markets, and therefore a decline in global trade,” says Zorica Savic, the company’s director.
At Masterwood from Kozarac, a company that manufactures and sells furniture, they point out that they have work to do, but considering that it is difficult to get raw materials, they fear that they will not be able to satisfy customers in the foreseeable future.
“We are afraid of what will happen in the winter, when cold weather begins and when people in Europe start dealing with the procurement of energy sources and other problems. I am afraid that the demand will be drastically reduced, and therefore our production. As for exports, for now we have no problems,” said the owner of the mentioned company, Dragoslav Siljak.
The foreign exchange turnover of Republika Srpska (RS) for nine months of this year amounted to 9.28 billion BAM and is higher than the same period last year by 2,120,000 BAM, more precisely by some 30 percent. Exports amounted to 4.06 billion BAM and are higher by 884 million BAM compared to the first nine months of 2021. The foreign trade deficit amounted to 1.16 billion BAM and increased by 351 million BAM.
“There was a decrease in the coverage of imports by exports, from some 80 percent to slightly less than 78 percent. All this is a direct consequence of inflation. The growth of industrial production is only 1.5 percent. What worries us is that we had a growth in industrial production quite lower than the average of previous years. This was expected. The appearance of inflation initially has a stimulating effect on the economy and leads to the growth of economic activities. After that, if we observe high inflation growth rates and if it lasts longer, then we enter a period of stagnation and after we can also expect a drop in economic activity, which is the worst scenario,” mentioned Vladimir Blagojevic, spokesman for the RS Chamber of Commerce.
He also stressed that the prices of industrial products jumped by 23 percent, and in Germany by as much as 40 percent. Given that we import most of the products, this also affects the operations of domestic companies, Klix.ba reports.