BiH first in the region in terms of inflation, a reflection of government's work

SARAJEVO, (Patria) - Inflation in Bosnia and Herzegovina is by far the highest compared to countries in the region, which is not surprising, because, as economists claim, the authorities in Bosnia and Herzegovina are the only ones that have not adequately responded to the rampant prices, primarily of energy, but also of basic foodstuffs.

In Bosnia and Herzegovina, inflation in May was 14.4 percent, in Serbia 10.4 percent, while in Croatia, May inflation was 10.8 percent. The inflation rate in Montenegro in May this year compared to May last year was 11.7 percent, while in Slovenia, inflation in May was 8.1 percent, with an increase of another 2.3 percent in June. 

This increase in inflation in Slovenia is a sign for economists that June inflation in BiH will be much higher than the current 14.4 percent. 

When it comes to inflation in Bosnia and Herzegovina, one of the biggest causes is certainly the price of food, which is rising much faster than in European Union countries. 

For example, as of April, the price of food in BiH increased by slightly more than 20 percent in a year, while this increase in the European Union was slightly less than nine percent. At the same time, energy prices, primarily oil, have had a significant impact on inflation in Bosnia and Herzegovina, and at the moment, Bosnia and Herzegovina is the only country in the region that has not intervened in this regard. 

Otherwise, when it comes to the Eurozone, May inflation was 8.1 percent, and what is worrying is that it is still rising, given that in June it was 8.6 percent. The highest inflation rate was recorded in Estonia - as much as 22 percent, followed by Lithuania with 20.5 percent and Latvia with 19 percent. The lowest inflation was recorded in Malta at 6.1 percent, France at 6.5 percent, Finland at 8.1 percent, etc.

The forecasts of European economists regarding inflation are not optimistic, and given that Bosnia and Herzegovina imports inflation, it is almost certain that negative trends will continue in the future. 

Bruno le Maire, the French Minister of Finance, recently said that Europe is in the midst of the peak of inflation, which will last at least until the end of the year, but that high levels are expected until the end of 2023, when even after 2023, inflation will be structurally higher than what we have experienced in the last few decades.

Experts in BiH, primarily the Central Bank of Bosnia and Herzegovina, have already revised their inflation estimates once and predicted a growth of 9.2 percent in the first half of the year, which will certainly be exceeded, given that inflation was 7.4 percent in January, 8.7 percent in February, 11 percent in March, 14.1 percent in April, and 14.4 percent in May. 

"We expect inflation to slow down in the second half of the year, primarily due to the base effect from 2021 and the assumption of no further intensive increase in food and energy prices," stated the Central Bank of BiH at the end of March.