According to the data of the Destatis Statistics Office, the German economy fell by 0.3 percent in the first quarter of this year compared to the previous one. A decline in GDP was also recorded. Economic analysts explain that the economic development of Germany is hindered by the decline in private consumption, and they see the negative trend in the last two quarters as a sign of recession, a scenario that many feared.
Expected data
Economic analyst and member of the Association of Economists of Republika Srpska (RS) – SWOT Aleksandar Ljuboja believes that such data are expected, but that the worst is yet to come. The decline of the German economy, as one of the most important foreign trade partners of Bosnia and Herzegovina (BiH), will greatly affect the situation here. He explains that inflation in Germany has not been stopped at the planned 2-3 percent, but is now at around 6 percent and that the troubles started with the pandemic.
“Then comes a new shock due to problems with energy products, and speculators appeared who took advantage of the situation to make extra profit. The same thing happens with food and a breakdown of all economic theories known so far occurs. One of them was that an economic crisis comes every ten years, but now we have a crisis every year. The consequences are a reduction in the volume of production, the breakdown of supply chains, changes in the way the population functions, there is a drop in the value of wages, and an increase in the prices of all goods,” Ljuboja stated.
Destatis indicators are not yet as worrying as they will be in the second and third quarters of this year, says Ljuboja, who expects the number of poor people to grow, the German economy to decline further, and imports to decrease.
Fortunate circumstances
He considers the fact that we have enough electricity, and wood, that oil prices are falling, and when it comes to food that our strategic partners are Serbia and Croatia, which will find themselves in the same situation, as fortunate circumstances.
However, the decline in exports inevitably leads to the loss of jobs and the total volume of production in BiH.
“It is worrying what is happening in the countries of Western Europe, and we do not have much influence. Perhaps we could stop respecting international agreements in certain segments and protect domestic production, and agriculture, and market our goods to ourselves, but with adequate prices and quality that domestic producers would respect. We send huge amounts of money abroad for water and something that we can produce ourselves,” Ljuboja pointed out.
It also depends on the harvest
Much will depend on this year’s harvest and how the weather conditions will affect production, not only here but also in the immediate surroundings, which is very important to us, Ljuboja believes.
“If the precipitation has a very negative impact, then we will really have problems,” added Ljuboja.
With the system of connected containers, BiH will experience a blow when it comes to exports, Ljuboja concluded, Avaz reports.
E.Dz.
