The governor of the National Bank of Serbia, Jorgovanka Tabaković, spoke to RTS about chip inflation, the boycott of megamarkets, and movements in the euro. She did not explain why grocery items in Serbia are among the most expensive in Europe
Prices in stores are more than inflation, and the governor NBS says that food prices in Serbia, along with energy prices, were the key driver of inflation, and what affects all of us as consumers the most is precisely the movement of food product prices, says the governor of the NBS.
"That's why their higher growth often creates the impression that overall inflation is even higher than official data indicates," says Jorgovanka Tabaković for RTS. "At the same time, there are categories of food products (fruits and vegetables, oil, sweets, soft drinks) whose price growth is greater than both the overall growth of food prices and the overall inflation."
With the arrival of the new agricultural season, the prices of fruits and vegetables should be at a lower level, she added.
Chipflation – cheaper becomes more expensive
The phenomenon of chipflation is being talked about more and more, and Tabaković says that the National Bank of Serbia has tested and confirmed its presence in Serbia in the period from the beginning of 2022 to the end of 2024, using the example of 58 products from the category of processed food and beverages (dairy products, meat products, coffee and soft drinks, confectionery products, etc.).
"We believe that the key reasons that can lead to this phenomenon are the generally low price elasticity of demand for food, then the replacement of more expensive brands by cheaper ones in a period of heightened inflationary pressures, and the imperfection of market structures, which facilitates the transfer of increased production costs more than fully to retail prices, which I have repeatedly pointed out in public," she says.
The phenomenon that the prices of cheaper brands are increasing more than the more expensive ones also has a social character, because it directly affects the population with a lower income, added the governor.
What do you think about the boycott?
When asked about the ongoing megamarket boycott, at the invitation of the Effectiva association, Tabaković said that the data on the turnover of the boycotted retail chains in one day or one week is not enough to see the wider consequences, but they can send a certain signal to retail chains regarding the policy of retail prices.
"A boycott can only have short-term effects due to lower turnover in retail trade on boycott days, while only systemic solutions can have the effect of slowing price growth on a more permanent basis." This implies that all actors in the supply chain, from manufacturers, through wholesalers to retailers, are aware of their role and behave responsibly and rationally when it comes to setting prices, because a decrease in turnover does not benefit anyone", the governor added.
What will happen to the euro?
The strengthening or weakening of the euro against the US dollar on the international market does not have a direct impact on the movement of the exchange rate of the dinar against the euro as a reference currency on our domestic foreign exchange market - claims Jorgovanka Tabaković.
It is necessary to bear in mind that all developments in the international environment, including geopolitical crises, protectionism, decisions of leading central banks and other developments, affect the movement of supply and demand for the euro on the domestic foreign exchange market, she said.
Source: RTS
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