In the upcoming months, citizens of the region will have to closely monitor prices and the standard of living, because inflation, according to the forecasts of Bloomberg Adria’s analytical team, will not subside. Economic analyst Igor Gavran has a similar opinion.
“When it comes to the prices themselves and their movement in the coming period, I agree with the forecasts that the inflation rate should be lower, however, that lower inflation rate will not mean a drop in prices,” stated Gavran.
Until now, inflation has had a negative impact on both the economy and citizens, and as Gavran explains, it also affects citizens’ health. Analyzes of sales on markets and in stores show changes in the structure of goods, Gavran says, adding that most citizens exclusively focus on cheaper types of food and low-quality food, giving up healthy foods, which in the long term harms both citizens and the health sector.
“I wouldn’t say that a good part of those price increases are justified,” he states.
A new increase in prices was recorded in Bosnia and Herzegovina (BiH). The prices of products and services measured by the consumer price index in January 2023 compared to the previous month recorded an average increase of 0.5 percent.
The annual inflation rate in BiH in December was 14.8 percent, after the maximum of 17.4 percent reached in October. As in the rest of the region, food prices had the biggest impact on the jump in general inflation.
Inflation by entities
According to data from the Federal Bureau of Statistics, inflation in the Federation of BiH (FBiH) continues to slow down. In January 2023, it amounted to 14.7 percent on an annual basis. Compared to December 2022, consumer prices increased slightly, by 0.3 percent.
After a slight monthly decline in December last year, the prices of products and services for personal consumption in the Republika Srpska (RS) in January of this year rose by 0.6 percent, which contributed to annual inflation remaining at a level of over 13 percent, the data of Republic Institute for Statistics show.
The average salary of employees in the RS could not “cover” the monthly increase in prices, but it exceeded the annual inflation by three percent. Compared to January 2022, the total consumer price index in January of this year is 13.4 percent higher on average. At the same time, the average net salary is nominally higher by 16.8 percent, and in real terms by three percent.
Eldar Dudo, Director of Uniqa Insurance, in a discussion on the topic of inflation for Bloomberg Adria TV, said that the insurance market has shown exceptional flexibility and resilience, and even growth in the past few years, Bloomberg Adria reports.