Growing prices have become part of the daily life, so new prices in the shops are not a surprise anymore, while the economists say that the corrections will be small, due to weak consumption power of the population. They announce the 5.5% limit of the projected inflation for this year will be breached, since the imported merchandise will be more expensive due to the exchange rate of the euro, and the locally produced goods due to the prices of raw materials. Zorica Mijuskovic has more on the subject.
The prices have been mostly “pushed” by the exchange rate of the euro, since many local products have imported components, and there are also the fuels that are also paid in foreign currency. Still, not all raising prices are justified, point analysts, adding that the price lists have been set to the exchange rate of 120 dinars per euro. To consumers it looks like the price corrections have been bigger than shown by the official statistics. According to the estimation of the National Bank, the increase of the inflation will continue due to a new agricultural season, but also because of the growing prices of imported merchandise and regulated prices in the second half of the year. The Ministry of Agriculture and Trade has extended the validity of the Decree on limiting the sales commission on the basic life items to 10%, for another six months, which sounds like resolve to continue the freezing of the sales profits by the end of the year.
All recent European statistical analyses rank Serbia at the bottom of living standard ladder, with only Albania and Bosnia-Herzegovina beneath. Most families are making ends meet with incomes that are a half of the republican average, and the food “eats” almost the whole salary. On the average, the households dispose with 440 euros monthly, with the average value nominally growing. The reasons lie with lay-offs of employees with lower salaries, whose number has gown to 22 thousand in the last year. Most money, i.e. 40.3%, is spent on food. More than 90 thousand of the employed are unable even to buy the basic groceries for their salary, and for a half of them surviving is a miracle, because they do not receive their paychecks regularly. Those who earn up to 720 euros monthly are in somewhat better position, but they make for less than 10% of the population. The earnings are best in Belgrade, Pancevo and Kragujevac, and lowest in southern Serbia and smaller places in Vojvodina. Highest average salaries are found in the tobacco industry – around 870 euros, while those in the textile industry, 160 euros, are far from reaching the value of the consumer basket.
The unions are appealing for the soonest possible forming of the government, otherwise the autumn increase in prices will initiate a great surge of dissatisfaction. Regardless of the fact that none of the political options accepts the freezing of salaries, citizens’ earnings will be diminished anyway via the changing exchange rate and growing prices. By the end of 2012 it will be necessary to provide new 2.5 billion euros to finance the deficit and principal payment of previously taken loans. In case of losing the investors’ trust at one point, the state could not finance some of its basic obligations, thus collapsing financially, warn the experts. They are worried because the politicians show no serious intention to take unpopular measures, and the longer the wait, the higher and more painful the political price.