According to the forecasts of the Central Bank of BiH, in the first quarter of this year the total inflation should amount to 3.8 percent, which is a better result than in the last quarter of the previous year, when it was 4.2 percent.
However, does this mean that BiH expects a better year than the previous one when it comes to inflation?
In the announcement of the Central Bank of BiH, the estimate is that the growth of real economic activity in the third quarter of the previous year was 1.9 percent, which is almost identical to the estimate from September when it was two percent.
“The preliminary estimate of the annual growth rate of real GDP for the last quarter of the current year is 2.1% and is based primarily on activities in the service sector, with a limited contribution from manufacturing activities. In the fourth quarter of 2025, we estimate overall inflation at 4.2% and core inflation at 4.3%. Overall inflation has been slightly revised upwards (0.3 percentage points) compared to the flash estimates from September, due to the strong increase in food prices, and overhead costs primarily due to the increase in electricity prices of energy”, stated the Central Bank of Bosnia and Herzegovina.
They added that they currently estimate that inflation will gradually slow down in the short term, primarily due to the base effect.
“Our preliminary estimate of total inflation in the first quarter of 2026 is 3.8%, and the basic estimate is 3.5%. These estimates are based on the assumptions of current information from the labor market about minimum wages in 2026. Our estimates of economic activity and inflation in the short term are still in line with those from the autumn round of medium-term macroeconomic projections,” the Central Bank of BiH pointed out.
Economist Igor Gavran told “Nezavisne novine” that such a slight drop in the expected inflation rate does not indicate any significant improvements.
“The reason for this is that prices have increased so much in previous years that this 3.8% has a similar or even greater effect than a much higher rate would have had a few years ago. The base price is much higher, and so are the price increases in absolute terms,” emphasized Gavran.
According to him, this also does not mean any decrease in the price growth rate of the most important essential products and services such as food, they write Independent newspaper.
“Citizens cannot expect any improvements in the standard of living. The only thing that would have an effect would be serious action by the authorities on price control and maximum price limits in accordance with real costs. We need a drop in prices, not a drop in their growth rate,” concluded Gavran.
