Original article (in Serbian) was published on 23/03/2022
These days, pro-government tabloids in Serbia are writing about the struggle of European countries because of the crisis “caused by the war in Ukraine”. However, an increase in food prices was recorded last year, when there was no war in Ukraine. According to economists – the war in Ukraine only further affects the rise in prices, and we will see further consequences. While the tabloids attribute the rise in prices and shortages of goods exclusively to the war in Ukraine, they are silent about the same problem of price increases in Serbia.
“Europe is collapsing, a rush for canned bread”, states Srpski Telegraf (Serbian Telegraph), further claiming that “in Europe, in the midst of the Ukrainian crisis, there is a real collapse in many areas, which threatens to escalate into a real catastrophe”.
Informer also wrote about the largest European countries, “fighting against the crisis caused by the war in Ukraine”. Judging by those texts – Europe is practically falling apart, and everything has become more expensive.
For example, in the print edition from March 18, Informer wrote that the cheapest gyros in Greece is four euros, while before the war, the price was one and a half euros. Informer then writes about the increase in the price of bread in Italy, and that the price of one portion of french fries in Belgium is now 6.5 euros.
Although general food prices are indeed rising, these claims are exaggerated because the rise in prices was recorded even before the conflict began.
According to Eurostat data, annual inflation in the European Union rose to 6.2 percent in February 2022, compared to January 2022, when its rate was 5.6 percent.
The biggest contribution to the growth of inflation in the Eurozone (countries where the euro is the official currency) was the increase in the prices of energy, services, food, alcohol and cigarettes.
According to the Food and Agriculture Organization of the United Nations (FAO), food prices rose by 20 percent in February this year (a new record), compared to the same period last year. Vegetable oil and dairy products became more expensive.
Nova ekonomija wrote about global price growth at the beginning of September last year. A rise in the prices of sugar, wheat and vegetable oil was recorded back then.
Economist Milan Kovacevic says for Raskrikavanje that the current conflict in Ukraine additionally affects the rise in prices, and that one of the causes of the general rise in prices is the coronavirus pandemic.
“The coronavirus has made transport, logistics, and the supply of certain areas more difficult – that is why prices have risen. The countries defended themselves against the consequences of the coronavirus by issuing too much money, and then when the time came to improve logistics, facilitate transport, reduce obstacles, an additional obstacle appeared – Western sanctions against Russia, which further increased prices”, Kovacevic explains.
An economist Goran Radosavljevic shares the same opinion. He told Raskrikavanje that the uncertainty of the conflict in Ukraine has led to an additional increase in prices, but also that in politics, “the practice is to transfer failures to one global cause”.
Radosavljevic emphasizes that inflation (increase in the general level of prices) started even before the coronavirus pandemic.
“In the last quarter of 2019 and the first quarter of 2020, in countries such as Great Britain, France, Italy and Spain, the crisis began, that is, the economy stagnated. The pandemic was declared in March 2020, and everyone said that everything was bad because of COVID-19, and no one wondered what happened in the previous two quarters when there was no COVID-19”, says the interlocutor.
The increase in prices continued in Europe in 2021, and according to Goran Radosavljevic – the main reason is the increase in energy costs, whose price rose by almost 26 percent last year.
“There was no war in Ukraine back then. However, there were problems in the relations with Russia, there were problems related to poor planning of the amount of energy needed in 2021, due to the faster exit from the COVID-19 crisis”, explains Radosavljevic.
He also points out that the consequences of the conflict are yet to be felt because Russia and Ukraine are among Europe’s suppliers of energy and food.
In Serbia, too, prices have risen in the past period
Pro-government tabloids write about “dizzying” price increases in other European countries, but they bypass this topic when it comes to Serbia.
For example, in the context of current events, Informer sent a message to Europe – “IF YOU HAD FOLLOWED SERBIA, YOU WOULD NOT BE IN A PROBLEM! EUROPE IS PLAGUED BY SHORTAGES. NO OIL, FLOUR … Authorities restrict sales”.
The increase in prices and services has not bypassed us. According to the data of the Republic Bureau of Statistics – prices jumped by 1.1 percent in February this year compared to January. Furthermore, consumer prices increased by 8.8 percent compared to February 2021.
In order to prevent price increases, at the end of January 2022, the Government of Serbia adopted a decree on limiting the prices of staple foods (sugar, flour, edible sunflower oil, dairy products), which will be in force for 90 days. A similar decree was passed at the end of November 2021.
As declared in the statement, the goal is “further protection of the market, i.e., prevention of deformations in the formation of prices of these goods, which are extremely important for the supply of consumers, especially poor social categories”.
On March 10, the government passed a decree limiting the prices of petroleum products Euro diesel and Euro Premium BMB, which will be valid until April 11.
As Nova ekonomija wrote, consumer prices in Serbia increased by an average of 4 percent last year as well, compared to the previous year, 2020.
“In October 2020, the average price of oil was 139.50 dinars (around 1.2 euros), and in the same month in 2021, it reached 193.79 dinars (around 1.6 euros)”, wrote Radio Free Europe. The same source also added that according to the statistics of the Ministry of Trade, the average salary in September 2021 was enough to buy 77 liters less oil compared to the same month in 2020.
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