Salary increases and problems in the region increase consumption prices in Kosovo

Salary increases and problems in the region increase consumption prices in Kosovo

IBNA Special Report

Pristina, May 20, 2014/Independent Balkan News Agency

By Elton Tota

Price increases for consumption products are causing problems for consumers in Kosovo.

Pensioners are the category which is facing the most this kind of problem. They say that they can hardly make their ends meet with the pension that they get.

According to them, now there are stronger fears based on the past, that pay increases may lead to the increase of prices.

The latest data made public by the Agency of the Statistics of Kosovo indicate that during the month of April, there has been a decline in the consumer price index, but citizens do not agree with these data.

Floods, an extra motive

Floods in Serbia and Bosnia have also increased fears of the residents of the capital. They say that they’re facing a fresh wave of price increases.

I.Zaimi, a student from Pristina, told IBNA that the crisis and the floods occurred in Bosnia and Herzegovina and Serbia will lead to an increase of prices in Kosovo.

“A price increase is expected because the floods in neighboring countries have caused damages in agricultural products exported to Kosovo. Due to the lack of this competition, we will have an increase of prices. This worries us due to the fact that prices are constantly growing and if this trend continues, our salaries will have a smaller value as opposed to developed countries”, says she.

A.Mehmeti works in the education system. She told IBNA that it’s impossible to support a family with the current salaries and prices that increase. According to her, not a month goes by without an increase of prices. She says this increase is being affected by the changes or crises occurring in the region or across borders.

“I save all my bills and I see the change in prices throughout the years. If we look at the prices a year ago, we may notice that the increase is almost 40%. I don’t understand how can prices increase every month. They also increase during every holiday and they remain the same after holidays. Merchants have no pity. They only think of their profits. Although there’s competition in trade and new shops open everyday, prices continue to grow”, says she.

Prominent Kosovar analyst, Vilhard Shala told IBNA that the economic crisis in the countries of the region and EU are the main reasons for a significant increase of consumer products, which hit the pockets of Kosovar consumers.

“Around 80% of consumption products in Kosovo are imported. Only 20% of Kosovar products penetrate in the local market, the market of the region and that of the EU countries. Kosovar market entirely depends on imports. In this situation, the government is not intervening to prevent price increases”, says Shala.

The analyst says that in an economy of the free market, the intervention of the state in prices is not recommended, but he also says that the government can suspend non productive projects which do not generate revenues.

On the other hand, merchants do not want to comment on this subject. The owner of a grocery store in Pristina says that prices are dictated by suppliers and distributors.

“Every time they offer us products at a higher cost, we’re forced to increase prices. Consumers often complain about frequent changes in the price, but we’re only sellers and our profit is marginal”.

In fact, such thing is also admitted by Agron Demi from the Institute for Advanced Studies GAP. He says that due to the high imports, Kosovo is unable to put prices under control.

The head of the non government organization, “Consumer”, Selatin Kacaniku says that Kosovar consumer is at the mercy of wholesalers and retailers. According to him, this is due to the fact that the people still do not respect the law in the country. He stresses that there is yet to exist a price regulatory entity.

“We have raised this concern in several occasions. We see that our consumers pay higher prices than many countries of the region or Europe for several products. Merchants are exploiting this situation, because we still don’t have applicable laws. We don’t even have mechanisms for the regulation of the market. Thus, we don’t have a regulatory entity, which would regulate prices in the market in relation to the quality and the purchasing power of consumers. As a result of this, we’re at the mercy of merchants; they will increase prices every time they change in international markets, but they don’t drop them when there are drops”, says Kacaniku. /ibna/