Inflation will drop in 2024, not even prices

By comparison, 2022 Kosovo has closed the inflation rate by nearly 12 per cent.

The price - raising rate known as inflation has given rise to the body's pandemic in 2020/21, and then to Ukraine's Russian invasion in 2022.

But, during this year, most countries have reported decline in inflation mainly due to the stabilisation of the supply chain.

What happens when inflation falls?

The decline in inflation does not even mean falling prices, but means prices rise more slowly.

Only occasionally can they fall a little over the previous month.

This year, REL has reported several times on high prices in Kosovo and their continued growth.

In March the price of flour has fallen, but not even bread. According to the report then, the decrease in the price of bread has not been possible because of the dearness of the current and the labor force.

In July, some citizens surveyed REL, they said it's hard for them to take vacation because of the expensive basic products and services.

And in September, the pickled vegetables were “invulnerable”.

Last round, if you took the peppers in bags [3 kg], it cost 1.5 to 1.8 euros. This year, 3 and a half euros is the same sack, with the same pounds. The tomatoes... last year we took 60 to 70 cents a kilo. This year you have 1.2 to 1.5 euros”, the buyer at the Green Market in Pristina has shown Amir Simnica.

A vegetable merchant at the Green Market in Pristina, September 11th, 2023.

Bridgements, unappreciated “”

Experts say consumers feel no immediate relief even when the inflation rate slows down, because many of the prices raised remain that way. Until salaries achieve inflation, it will continue to burden up, according to them.

In Kosovo, the average salary is 520 euros, while the minimum is drawn from 130 to 170 euros unchanged since 2011.

Blendy Haysa, from the Institute for Advanced GAP Research in Pristina, says that, based on the tests he has made, a family that has spent 500 euros over a month in 2021, during 2022 had to increase this budget for about 60 euros. And during 2023, the amount spent in 2021, it had to rise for 80 euros “to consume the same amount of products as in 2021”.

What are the predictions for 2024?

The European Central Bank forecasts are that the inflation rate in Western Balkan countries will be 3 percent in 2024.

Former governor of the Central Bank of Kosovo, Fehmi Mehmeti, predicts that Kosovo will complete 2023 at an average rate of 5.4 per cent inflation.

In January of this year, until it was at the top of the CEC, Mehemti has predicted inflation declines of up to 6 percent in the second quarter of 2023.

The expectations are that in next year [2024] annual inflation, roughly, will be about 3.6 percent. In 2025 alone, we expect to have 2 percent inflation”, says Mehmeti of the REL.

According to him, electricity is one of the products that is mostly expensive and the effect, then it was chain.

We're all family and we know what we've bought 100 euros before the pandemic... now it takes a lot more money to fill the consumer basket. We have higher inflation on basic products”, Mehmeti says.

It must be remembered that prices last year have taken on mainly from global energy prices. Various analyses say they will drop not before the Russian invasion of Ukraine but that any decrease in energy prices will take time to be observed in the wider economy.

Experts, too, caution that falling prices would not necessarily be good, as it would signal a weak economy, with reduced productivity.

Negative inflation or deflation is likely to lead, then, to considerable unemployment growth and lower wages.

According to the Kosovo Statistics Agency, unemployment in the country is brought to less than 12 per cent.

The data released by the AKS in late September showed that most of the family budget in Kosovo was divided for the purchase of food items.

According to the AKS, Kosovo families spent about 300 per cent more money on food than on living last year. / REL