The trade union demand basket in Bosnia and Herzegovina is about three thousand marks. Although the government is introducing measures that will limit price growth, the insufficient income of citizens is an essential problem. Increasing the minimum wage is a necessary step that could improve the financial situation to some extent.
While prices are rising and wages remain the same, the union’s consumer basket amounts to as much as 2,954 marks. Most citizens buy only the most basic foodstuffs, just enough to feed themselves. There is no place for luxury, they say, you live from today to tomorrow.
Global economic changes have consequences for Bosnia and Herzegovina. a society in which citizens are in credit debt mostly on the basis of non-purpose consumer loans, around 8.4 billion marks. The Tuzla Canton Consumer Club believes that the state really has the money to realize an increase in minimum wages, which would help citizens.
“Huge taxes poured in precisely thanks to the rise in prices and precisely because consumers filled that budget. The entire income from VAT practically comes from us”, says Gordana Bulić, president of the TK Consumer Club.
Economic analyst Admir Čavalić reminds us of the recessionary trends that relate primarily to Germany, that is, the slowing down of the German economy, which consequently has something to do with our exports: “Factories and the like are shutting down. This may mean the end of inflation as such, but on the other hand, the arrival of recession”.
What is evident even without a social card is that our society is losing the so-called middle layer of society, which used to be the driver of the economy. That layer made up the majority of the population, and today it lives on the poverty line.
“The locking of prices is precise with the intention of helping the part of the population that has problems to provide themselves financially for a month with these basic foodstuffs”, adds Bulić.
Čavalić points out that it is important to work on some measures in order to increase salaries, especially in the private sector, or influence the mitigation of inflation.
The standard of our society is among the worst in Europe, and it is not uncommon to hear that basic food items are stolen from stores. But, as economists claim, there is money for salary increases, the only question is whether there is goodwill among decision-makers.
Inflation in our country has been on the rise again in the past two months, which was reflected in the increase in prices. Almost everything has become more expensive. Food items and drinks have risen in price by 13 percent this year.
Inflation is slowing, but not abating. Prices rise automatically. Officials claim that in this and the next month, that is, until the end of the year, even a drop in inflation can be expected.
“For the first time, the Central Bank of Europe did not raise interest rates, which means that inflation is stopping. The growth of interest is stopped, which is very good, and we expect this year in the Republic of Srpska an average annual inflation growth of around 6 percent”, says Zora Vidovic, Minister of Finance of the RS.
The banking sector partly contributed to curbing inflation, in which, although Euribor rose from a negative value to four percent, there was no significant increase in interest rates.
“With us, the average growth of interest rates compared to the period last year when we measured it is below one percent, which is significant when we look at banks in Serbia, Croatia or the EU, where the growth of interest rates was between 3 and 4 percent compared to last year”, explains Srdjan Suput, director of the RS Banking Agency.
Monetary policy in Bosnia and Herzegovina is limited compared to other countries. We can neither print money nor reduce it in circulation. In fact, the only way our authorities can mitigate the negative effects of inflation is to increase wages, pensions and financial aid to the most vulnerable citizens.
“Through the increase of pensions and the constant struggle to increase the minimum wage in some way to help those vulnerable categories to overcome this very unfavorable situation. Especially from the aspect of the much greater increase in the prices of food and energy, which affect the poorest much more. In that sense, this aid was necessary,” says Sasa Grabovac from Association of Economists “SWOT”.
Although a large number of citizens will probably disagree, the numbers are undeniable. Earnings, however, grew at a higher percentage than inflation. For the first time since the war, two average salaries can cover the trade union consumer basket, which is around 2,500 marks. However, the question arises as to how the real sector will handle political promises about the lowest salary of one thousand marks.
“I am afraid that some low-productivity and low-efficiency economic activities will not be able to survive this and that these jobs will be threatened to a greater extent in BiH”.
Inflation is imported, and the local authorities are doing what they can to alleviate it. Could it be more? It sure is.
