Rising food prices have accelerated inflation in Serbia

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In Serbia, inflation accelerated on a monthly and year-on-year basis in February, and one of the main reasons was the acceleration of food price growth, it was published in the new issue of the professional journal Macroeconomic Analysis and Trends (MAT). In January and February 2022, monthly inflation of 0.8 percent and 1.1 percent was registered, as well as year-on-year inflation of 8.2 percent and 8.8 percent.

As stated, all basic categories of consumer baskets became more expensive on a monthly and year-on-year basis in February 2022, and in both cases the food prices rose the most due to the high price of unprocessed food. Food prices rose by 13.5 percent year-on-year in January and by 15.2 percent in February 2022. Food prices rose by 2.0 percent on a monthly basis and by 15.2 percent year-on-year.

At the same time, unprocessed food rose by 3.4 percent in the first case, and by as much as 26.3 percent in the second case. In February, the acceleration of year – on – year inflation, which began in March 2021, continued.

Monthly inflation accelerated in February 2022, as stated, exclusively under the influence of temporary factors, because, when its base component decreased, its non-base component increased. At the monthly level, in January and February 2022, core inflation (consumer price index excluding food, energy, alcohol and cigarettes) of 0.6 percent and 0.3 percent was recorded.

Also, non-core inflation (energy, food and non-alcoholic beverages, alcoholic beverages and cigarettes) of 1.0 percent and 1.8 percent was recorded in the same period.

MAT experts state that the acceleration of the monthly growth of food prices in February 2022 was the main reason for the acceleration of non-core inflation in that month. Food prices rose by 1.4 percent on a monthly basis in January, and by 2.0 percent in February 2022.

Year-on-year inflation, on the other hand, accelerated in February 2022, mainly due to temporary factors, because the increase in its non-core component was greater than the increase in its base component.

At the year-on-year level, in January and February 2022, core inflation of 4.1 percent and 4.4 percent was registered, as well as non-core inflation of 11.7 percent and 12.6 percent.

Once again, the acceleration of food price growth in February 2022 was the main reason for the acceleration of non-core inflation in that month.

Overall year-on-year price growth accelerated from 8.2 percent in January to 8.8 percent in February 2022 due to changes in the consumer basket. First, in February 2022, the share of items whose year-on-year price growth was below the lower limit of the target increased, and the year-on-year growth of their prices slowed down.

The share of these items increased from 20.93 percent in January to 24.68 percent in February 2022, and the year-on-year growth of their prices accelerated from -0.9 percent in January to -0.7 percent in February 2022.

Second, in February 2022, the share of items whose year-on-year growth in prices was within the target was reduced, and the year-on-year growth of their prices was accelerated.

The share of these items decreased from 25.07 percent in January to 18.94 percent in February 2022, and the year-on-year growth of their prices accelerated from 3.0 percent in January to 3.1 percent in February 2022.

Third, in February 2022, the share of items whose year-on-year price growth was above the upper limit of the target was increased, and the year-on-year growth of their prices was accelerated. The share of these items increased from 54.00 percent in January to 56.38 percent in February 2022, and the year-on-year growth of their prices accelerated by 14.2 percent in January to 14.9 percent in February 2022.

Serbia had higher year-on-year inflation than the EU average in both January and February 2022, and lower year-on-year inflation than five of its members in January and four of its members in February 2022, according to MAT, Tanjug reported.

In January and February 2022, year-on-year inflation, according to the concept of the harmonized index of consumer prices, amounted to 8.3 percent and 8.8 percent in Serbia, and 5.6 percent and 6.2 percent in the European Union.

Compared to Serbia, Belgium (8.5 percent), Poland (8.7 percent), the Czech Republic (8.8 percent), Estonia (11.0 percent) and Lithuania (12.3 percent) had higher year-on-year inflation in January. , and Belgium (9.5 percent), the Czech Republic (10.0 percent), Estonia (11.6 percent) and Lithuania (14.0 percent) in February 2022, Politika writes.