The total industrial production in Bosnia and Herzegovina (BiH)in December last year increased by two percent compared to November and is higher by 7.2 percent compared to December 2020.
Bad year
According to the BiH Agency for Statistics, growth was markedin the production of capital goods, energy, consumer goods, as well as other branches, while the annual decline of nine percent was recorded only in the mining and quarrying segment.
Growth percentages are just the result of comparing bad to worse years, economists agree.
Analyst Igor Gavran claims that the growth is minimal and insufficient to compensate for the losses from the pandemic and the period of cessation of business in many sectors.
”The economy was in a bad state even before the pandemic, so we need much higher growth rates to be able to talk about sustainable recovery and real progress. We are still far from that. And where some progress has been made, it has little or no impact on the living standards of citizens, because it does not guarantee income growth, and in the meantime, inflation and the price chain have devalued the income of those lucky enough to have permanent employment and stable income, ” Gavran stated.
Labor force
Prof. dr. Amila Pilav-Velic, a professor at the Faculty of Economics in Sarajevo, said that in addition to global disruptions, such as bottlenecks in supply chains, a growing disparity between labor supply and demand, and global energy price growth, the weakened BiH economy will face an additional inflationary blow.
”It is expected that the latest increase in electricity prices will cause an increase in economic costs by up to 20 percent, which brings a new wave of price increases for citizens. Although all actors in the electricity system declaratively point out that it will not happen, higher costs for companies mean higher prices for their final products, ” added Pilav-Velic.
Lay off the employees
Pilav-Velic considers the negative impact of rising electricity prices on the healthiest part of BiH to be a long-term challenge. economies – production chains in the most important sectors, their production volume, but also employees in those sectors.
In the end, prof. Amila Pilav-Velic emphasized: ”It is expected that even the largest companies will be forced to lay off employees. So, even though the Federation of BiH (FBiH)Development Strategy 2021-2027 for the metal sector, and especially the purpose-built industry, projects significant growth, positioning them as industries of strategic importance, it seems that the new inflationary blow will result in the opposite effect.”
E.Dz.
Source: Avaz
