The Government of North Macedonia has taken steps to lower the prices of 50 essential food items, aiming to protect its citizens from the surge in the cost of basic products. However, experts are doubtful about the effectiveness of this decision in actually reducing prices for these items.
These crucial products will be labeled as “guaranteed price” and will be available at a price 10% lower than the previous cost, starting from September 20 and running through November 30. Among the essential products to receive reduced prices are bread, meat, milk, dairy products, as well as fruits and vegetables.
North Macedonia’s Minister of Economy Kreshnik Bekteshi explained that the Government had to intervene to adjust the prices of basic food items due to significant disparities between local and global markets.
“All available analyses indicate that there is no justifiable reason for an increase in the prices of basic food items, either from the side of traders or producers. This should not be happening, especially when considering the prices on the global stock exchanges, which have witnessed declines,” stated Bekteshi.
Additionally, the Government has imposed a ban on the sale of food products with special promotional prices due to concerns of price manipulation or the encouragement of consumers to purchase the same products in larger quantities.
The Market Inspectorate has issued a stern warning of strict measures, including fines and business closures, for any potential violators of the Government’s decision.
Goran Trajkovski, Director of the Market Inspectorate, stated, “The state Market Inspectorate will apply the same measures to all entities without making any compromises or distinctions for those who fail to adhere to the regulations. We will continue with intensified on-site inspections to safeguard the standards of our citizens. We urge all citizens to report any irregularities they observe to the Market Inspectorate so that we can take appropriate actions”.
“Unproductive decisions”
This represents the fifth such decision by the North Macedonian Government this year concerning food products. Nevertheless, it has faced criticism from experts who argue that these decisions have not yielded the anticipated results. Instead, prices have risen following each decision.
According to government officials, food product prices in North Macedonia have surged by up to 47% this year, while in European markets, the increase has been no more than 10%.
Abil Baush, an economics professor, remains unconvinced that these measures will be effective and underscores the need for price regulation or reduction through free market competition.
“At a time when similar measures to freeze prices and profit margins failed to produce the desired results, as expected, it is unnecessary to implement identical measures to freeze prices. In such circumstances, alternative measures should have been considered, including initiatives from businesses to create a more competitive market. Therefore, these measures are constraining the market at a time when we should be encouraging competitiveness,” assessed Baush.
He suggests that institutions should prioritize local production by incentivizing and supporting it to compete with foreign products.
“We do not possess sufficient local production to meet the demands of our consumers. Hence, I believe that a strategy should be devised to stimulate local production. We are not witnessing an increase in the prices of local products but rather an increase in the prices of products originating from abroad – that’s where the issue lies,” he added.
The escalating prices of food products have also placed a strain on household budgets.
According to the Trade Union Association, in August, a four-member family spent 810 euros to secure basic living conditions.
