Is there end in sight to galloping prices?

Is there an end to the constant price hike? Although official statistics say that inflation recorded a slight decline for the first time in July, the government expects that prices will continue to rise at least until the year-end,  especially food prices.

Between July 2022 and July 2023, food prices rose the most – vegetables are the absolute record holder – in July they were 42.9% more expensive compared to a year before.

Retail prices of Eggs, milk and cheese jumped by 28.4%. Fruit is 14.4 percent more expensive than last July, and meat is 13.3 percent. However, the National Bank expects inflation to fall by the end of the year. What do economists say about that?

“Inflation will decrease until the end of 2023. It remains to be seen whether it will be single-digit. I guess it will stop somewhere around 9%, maybe 10%, but of course, that does not mean that prices will not continue to rise. They will but at a slower pace. The living standard of citizens is in jeopardy because our consumer basket is such that we spend more than 40% of our income on food,” explains economist Nikola Stakić.

There will be another increase in energy prices in autumn. Although both electricity and gas have become more expensive (by about 22 percent in total in just one year), new prices are just around the corner. According to announcements, electricity price will go up by 8% and gas by 10%. Energy experts agree that these price hikes are a consequence of bad management of the energy sector.

“The price hikes have been agreed between the International Monetary Fund and the Serbian government because, in the previous period, the Serbian state budget suffered a lot due to the big losses made by (state-owned) Srbijagas and the Electric Power Industry of Serbia (EPS). The problem with Srbijagas is that it maintains an unusually low price of natural gas which is a political decision, while the problem with EPS is the unprofessional management of that company,” says energy expert Miodrag Kapor.

Now the Government is announcing the implementation of long-announced reforms in the electrical energy sector, at the expense of the citizens. In the meantime, around 400,000 people work for minimum wage every month which doesn’t cover the costs of the minimum consumer basket.

(N1, 15.08.2023)

This post is also available in: Italiano

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