Price and GDP growth

One of the trends that marked the previous period is the rise in prices. Inflation (measured by the consumer price index – CPI) increased by 10.1% in the first eight months of 2023 compared to the same period of the previous year. The inflation rate was most affected by the increase in the prices of food and soft drinks, which increased by 14.4% in the observed period. High price growth was recorded for housing, water, electricity, gas and other fuels, which were higher by 11.8% in the period January – August 2023 compared to the same period in 2022. Taking into account the structure of the population’s consumption, such trends have a significant impact on the real household income. The rise in prices canceled out the rise in wages. In the comparative period, net wages nominally increased by 11%, while real wage growth amounted to 0.8%. During the period January to July, the annual inflation rate gradually decreased (inflation decreased from 16.2%, which was in January to 6.9% in July). However, the inflation rate was recorded again in August, when prices were higher by 8.6% compared to August 2022, mainly due to the increase in the prices of food products.

The analysis of the monthly inflation rate shows that during the previous period the monthly inflation recorded a constant growth. The only period when the monthly inflation rate was negative was March 2023, while from April to August, the growth rate was recorded, ranging from 0.4% to 1.7%. The increase in monthly inflation in August 2023 was mostly influenced by the increase in the prices of Fuels and lubricants for personal transport equipment for 6.9% and Solid fuels for 7.3%. The rise in the prices of fuels has contributed to the rise in the prices of other products as well, given that fuel is part of the cost of many products. Considering the decision to reduce and limit the supply of oil by Russia and Saudi Arabia, it can be expected that the reduced supply will affect the price of oil, which will also affect the prices of other products in the coming period. Also, vegetables and meat had a significant contribution to the monthly inflation, whose prices on a monthly level increased by 1.4 and 2.2, respectively.

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