There is no end in sight to the coronavirus pandemic, and, it seems, to the global pandemic of rising prices as well. How does world inflation affect our country? We have the biggest price increase in oil and electricity. And then the costs of processing, packaging, and transport increase in chains. Which ultimately means a higher price for products, specifically basic foodstuffs.
After leaving 2021 with a short celebration, we received new price increases as a gift. The price of fuel in Bosnia and Herzegovina (BiH) is currently about 25% higher than in the same period last year. The price range is best shown by the fact that only in February this year, compared to January, the price of diesel was higher by 6.9%. Such prices are mostly caused by the rise in the price of oil on the world market, as well as the exchange rate of the United States (U.S.) dollar. The fact is that BiH as an importer cannot influence these factors.
But experts say the state is not doing what it can to protect domestic producers and citizens from rising prices. One of the few safeguard measures is the Decree on Limiting the Margin on Petroleum and Petroleum Products. Also, the Federation Government has limited the increase in electricity supply prices for eligible customers to a maximum of 20 percent over the previous year. Unlike BiH, the countries in the region are trying to mitigate the financial blow to the citizens with somewhat more concrete measures. But the advantage of these countries is that they are not heavily dependent on imports.
Due to these problems and increased imports, more and more BiH farmers give up wheat production. The shortage of this culture is also present at the world level, which is why its price is constantly rising. The United Nations (UN) says the price of wheat is 40 percent higher. The price of sugar is so much higher, and edible oil is 60 percent more expensive. Overall, food has risen by 30 percent and is the most expensive in 60 years.
This global situation has been influenced by several factors. First, the coronavirus pandemic, during which food demand has increased, restrictive measures combined with rising energy prices, labor shortages, and rising transport costs. High energy prices have led to higher prices for artificial fertilizers. Then worsening weather conditions. All of the above is obviously too much for the government in BiH. Especially because they haven’t done anything concrete to protect domestic production for years. In order to make a strategy and adopt concrete measures, work must be done.
Sabina Silajdzic, a professor at the University of Economics, UNSA, was asked how to deal with everything and what exactly the authorities could do: ”We import inflation. What is available to us is to prevent inflationary spirals caused by speculation and embezzlement. The government now has a legal basis to monitor and control the growth of energy prices in order to prevent further price increases that are unfounded. The government should at least take into account the socially vulnerable categories, it should consider the possibility of corrections and increases in pensions and other social benefits.”
If such moves do not occur, it is certain that we will pay far higher prices for goods and services this year, while our incomes remain the same. The only thing that gives hope is some projections that the situation on the world market will improve.
E.Dz.
Source: Federalna Photo N1
