Consumer prices in October increased by 2.5 percent compared to the previous month, and compared to the same month in 2021, they increased by 19.1 percent, the Institute for Statistics of the Federation of Bosnia and Herzegovina (FBiH) announced.
Dependent on imports
Rising prices of food, transport, and energy contribute the most to the record annual inflation.
”We don’t need statistics to see how much money we give for two bags of necessities this year compared to the previous one. At the beginning of this month, the International Monetary Fund (IMF) projected that inflation in BiH will be 10.5 percent, which is far from good news, but, if we compare it with the real situation, it was a very optimistic assessment,” says Doctor of Economic Sciences Ranko Markus.
He explains that inflation in BiH is largely ”imported”, because the domestic economy is dependent on imports, and he cites as an example the prices of gas and oil derivatives, which BiH has no influence on, and which significantly determine the prices of other products.
”Supply chains are hampered. We often hear that companies cannot purchase raw materials or that they purchase them at significantly higher prices. Energy prices change on a daily basis. The workforce is mostly looking for work abroad, so the saying ”if you won’t work, someone else will” now goes ”if you won’t pay me, I have someone else to work for”. Altogether, it encourages inflationary trends, so at the moment money is worth less and less,” Markus added.
A reasonable measure
There are no announcements that it will be different in the near future, so Markus advises paying special attention to the prices of electricity and pellets.
”We have now reached the stage where the price of a kilowatt-hour from pellets is equal to that from gas. It was not possible to reach such a relationship without speculation on the market.
Limiting the price of pellets is a reasonable measure that can be used to influence such speculative flows,” he stated.
On the other hand, the export of electricity at significantly higher prices limits domestic consumption, so consumers are urged to consume rationally.
”A lot will depend on the winter temperatures, which we also cannot influence,” Markus concluded, Avaz reports.