The recent surge in the prices of bread and other staple food products in Bosnia will not fuel inflation or jeopardise the country's stability, the Bosnian central bank governor was quoted as saying on Monday. Bread prices have gone up by up to 50 percent in recent weeks, driven by a global increase in wheat prices.
Bosnian meat producers have also announced hikes, despite warnings of social unrest by trade unions and protests by consumer groups. "The announced wave of hike in prices will not trigger inflation or jeopardise Bosnia's macro-economic stability," governor Kemal Kozaric told the Nezavisne Novine daily.
"The central bank will at no price print new money," Kozaric said, adding that only slight changes may occur "as inflation in Bosnia remains in line with the European Union average". Bosnia's currency, the Bosnian marka, is pegged to the euro at a fixed exchange rate under a currency board.
Official data shows Bosnian inflation at just 0.8 percent year on year in July. Kozaric said the governments of Bosnia's two autonomous regions, the Serb Republic and the Muslim-Croat federation, should create social programmes to protect the most vulnerable social groups.
The two governments have not announced special plans so far, saying only they might assist the most vulnerable groups, such as pensioners with the lowest monthly pensions. "Price hysteria is caused by trade lobbies and has nothing to do with the current state of the market," Perica Jelecevic, labour and social affairs minister of the Muslim-Croat federation, told the daily in the same article.
Home-grown crops meet only 20 percent of demand in Bosnia, which imports 400,000 tonnes of wheat and 200,000 tonnes of maize every year, mainly from Serbia, Croatia and Hungary.
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