Food prices in the region still rising

14/01/2013

Economic reforms and systematic employment could improve the situation in the region.

By Drazen Remikovic for Southeast European Times in Sarajevo -- 14/01/13

Experts say that food prices will increase this year. [AFP]

An average basket of food is becoming more costly in Bosnia and Herzegovina (BiH) and the region, and the price growth is expected to continue through the year.

Data from the BiH statistics agency shows that the average amount spent on food in November was 944 euros for a family of four, 20 euros more than the previous month, and 120 euros more than the same month in 2011.

With an average salary of around 420 euros, not even two salaries can cover a family's monthly food bill in BiH.

"Meat, eggs, fruits, vegetables, oil and flour saw a price increase. One family in BiH is spending more than 50 percent of its house budget on food, while in the EU for the same is 15 percent. But the salaries have been stagnating [in BiH] for years," Ismet Bajramovic, president of the BiH association of labour unions, told SETimes.

In December, the price of sugar increased by 3.5 percent from November, while the price for a litre of cooking oil was 1.20 euros, a 15 percent increase from November. Meat prices increased by 7 percent, while flour cost 9 percent more in November than in October 2011.

Mladen Ivanic, a member of BiH's parliamentary committee for economic reforms and development, said that the situation could improve with systematic employment and new investments in economy.

"The state should also tax the rich and introduce the new, special VAT rate for the rich. Unfortunately, chances of the state to do something about it are small, because there is still political chaos in BiH. So, I think that the citizens should prepare for new price increases, and this year will be financially harder than the previous one," Ivanic told SETimes.

The World Bank's 2012 report for Southeast Europe said that from October 2011 to October 2012, the prices of food rose about 3 percent in Albania and Kosovo, 5.9 percent in Macedonia, 6.8 percent in Montenegro and 13 percent in Serbia.

In Serbia, more than 40 percent of the average household budget covers the cost of food. Experts say that food prices will surely increase this year, especially due to the expected increase in electricity prices this spring.

"Food will definitely rise in the new year. In Serbia, and the Balkan countries, there was not a single month in 2012 in which something didn't get more expensive; food, fuel, gas, utilities, everything. Real consumer purchase power, compared to 2011, dropped over 30 percent … which is not a [living] standard, but mere survival," Vera Vida, president of Serbia's consumer centre, told SETimes.

An average salary in Serbia is about 376 euros, one of the lowest in the region.

"New price raises will force the citizens to raise [funds] 'short-term'," leading to unfavourable loans, to cover subsistence needs and pay bills. "I fear that debts will exceed the monthly income," Tanja Popovic Filipovic, director of the Zagreb centre for education and consumer information, told SETimes.

The price increase in Kosovo is slow, but constant.

"A slow but permanent increase of food prices, which calculated on an annual basis, shows that the price of some basic articles exceeded a 15 percent increase," Selatin Kaqaniku, chairman of the NGO Konsumatori, told SETimes.

He said his organisation noted a 1 percent increase in the cost of consumer needs on a month-to-month basis.

But, he added, "At that level [of increase] we didn't see a wage increase, or [growth] of the country's employment rate."

SETimes correspondent Safet Kabashaj in Pristina contributed to this report.

This content was commissioned for SETimes.com.