Inflation in Republika Srpska is slowing, although global risks such as energy and food prices could affect price trends through the end of the year, while economic indicators point to continued GDP and employment growth.
Darko Milunovic, director of the Republika Srpska Institute of Statistics, said inflation had slowed for the second consecutive month, with annual inflation standing at 4.5 percent at the end of June.
“At the beginning of the year, inflation stood at 6.8 percent. After more than five years, food and non-alcoholic beverages recorded an annual decline in prices, which contributed to the slowdown in inflation in Republika Srpska,” Milunovic said.
As of March, Republika Srpska had 290,727 employed persons, an increase of 0.5 percent compared with the same month last year.
The manufacturing and trade sectors account for the largest numbers of employees, while the average net salary at the end of June stood at BAM 1,698.
Republika Srpska GDP could reach BAM 20 billion
Milunovic said Republika Srpska’s gross domestic product could reach BAM 20 billion by the end of the year.
According to official statistics, GDP amounted to BAM 18.7 billion in 2025.
Over the past 20 years, Republika Srpska’s GDP has increased 3.3-fold, or by approximately BAM 13 billion.
Economic growth continued in the first quarter of 2026, when GDP increased by 2.1 percent compared with the same period last year.
“According to current indicators, Republika Srpska could reach GDP of BAM 20 billion by the end of the year,” Milunovic said.
Foreign trade deficit reaches BAM 1.32 billion
Republika Srpska’s total foreign trade in the first six months of 2026 amounted to BAM 6.55 billion.
Exports accounted for BAM 2.61 billion, while imports reached BAM 3.94 billion.
“Exports stagnated compared with the first six months of the previous year, while imports increased by 7.1 percent. The foreign trade deficit amounted to BAM 1.32 billion, while the export-to-import coverage ratio stood at 66.4 percent,” Milunovic said.
He added that the manufacturing industry remains a major obstacle to stronger economic development.
Global risks could put renewed pressure on prices
Predrag Mlinarevic, professor at the Faculty of Economics at the University of East Sarajevo, said the main risks of renewed price growth through the end of the year were potential supply shocks and the speed at which they could be transmitted to consumer prices.
He pointed in particular to oil prices amid geopolitical developments in the Middle East and the potential impact of drought on food prices.
A poor harvest caused by drought could increase prices of primary agricultural products, with those increases subsequently spreading through production chains and pushing up food prices.
Mlinarevic said he does not expect macroeconomic policy measures through the end of the year that would significantly increase inflationary pressures.
He cited the absence of planned increases in the minimum wage, sharp increases in salaries and pensions that could generate demand-driven inflation, or tax increases that could push prices higher.
According to Mlinarevic, the greatest inflation risk through the end of the year comes from supply shocks affecting energy and food prices, as well as the possibility that some retailers could use such developments to justify additional price increases.
If these risks do not materialize, inflation is expected to stabilize and decline slightly by the end of the year.
Source: Glas Srpske / glassrpske.com
Source: Glas Srpske
