Since the beginning of the previous government’s term, there has been a clear downward trend in the cost of living, but in the middle of last year, a turning point occurred, which marks the beginning of a clear upward trend in prices. The elections happened – and the current high cost of living in Slovenia is the price of the ballot paper. Robert Golob, Luka Mesec and Tanja Fajon cost more than you think. It is a fact that it is the higher prices of food and non-alcoholic beverages that have contributed the most to annual inflation – but so far, the government does not seem to be taking any action, except for the fact that Golob’s basket of essential goods is magically getting cheaper every month.
On the global scale, food prices are slowly falling, wrote the media outlet Slovenec in January, adding that, unfortunately, we will not feel this in our shops. This is due, among other things, to the extremely high price of electricity, while the high price of food is also influenced by the increase in the minimum wage, which is also, at least partially, pushed to the consumer by retailers. According to data from the Statistical Office of the Republic of Slovenia (SURS) from December 2022, the prices of food have risen by almost 19 percent compared to the same period a year ago, and the rises will only continue in 2023. Given that the government capped electricity prices for micro, small and medium-sized enterprises at the end of last year, the rise in retail prices was also expected to be mitigated, but this has not happened. Products that households buy on a daily basis have increased in price by up to 50 percent.
While globally, the price of meat has risen by a good two percent, in Slovenia, meat prices have risen by almost 20 percent in one year – paradoxically, the purchasing prices in Slovenia are below the European average, so a high proportion of food produced in Slovenia is bought by foreigners. But this is not the only paradox we see in Slovenia: we also buy electricity on the stock exchange at one of the highest prices, while producing it relatively cheaply at home. “We are finding that the current price of electricity is the result of inadequate electricity management policies. We have sold off our own electricity at an extremely low price, but we have not secured the part we need, so now we have to buy it at (too) high prices. And this is happening even though we produce more than 80 percent of the energy we need ourselves,” the Slovenian Business Club (SBC) wrote some time ago. As mentioned above, high electricity prices have an impact on everything else – including the price of food.
Food is getting more expensive, but Golob’s basket of basic goods is getting cheaper every month
Compared to last February, the consumer confidence indicator has deteriorated by 13 percentage points, the Statistical Office reported last month – and consumer confidence is certainly not being helped by the current government’s price comparison of food products, as they seem to somehow be able to find shops where food is getting cheaper every month, as the economist and former Minister of Finance, Janez Šušteršič, also pointed out. Unfortunately, ordinary citizens cannot find these shops, nor can the statistics office, which has recorded month after month of rising prices. In January this year, the cost of necessities rose by an average of 10 percent on an annual basis and by 0.2 percent on a monthly basis. Both annual and monthly inflation was mostly driven by higher prices for food and non-alcoholic beverages, which rose by 19.3 percent on an annual basis and by 2.1 percent on a monthly basis, the Statistical Office noted in early February.
Golob himself is apparently also frustrated by the rising prices of food
At the end of July 2022, the Prime Minister announced that the monitoring of the prices of a basket of basic foods at different retailers would start in September, at which point the government would see whether self-restraint or self-regulation through price monitoring was sufficient or whether a “harder form” of food price regulation would be needed. This, according to the Prime Minister, should have been clear by October 2022. But of course, nothing actually happened, and at the end of February, in response to a question from MP Karmen Furman on the situation of Slovenian pensioners, Golob said, among other things, that in some areas, they have fared better, but unfortunately in some areas, they have fared worse.
“I will not hide my disappointment that this is particularly true for the area of food – not only in Slovenia but in the whole of Eastern and Central Europe, you can look at our Eastern neighbour Hungary, which has an inflation rate of more than 25 percent precisely because of the 40 percent and higher increase in food prices, and unfortunately in Slovenia, we are also a part of Eastern and Central Europe, where the food price increases are, unfortunately, higher than what our Western partners are experiencing. Time will tell why this is the case, but we will definitely be adopting new measures in this area, in the area of food price controls, and we will also look into whether the price hikes were really justified, because we are not at all satisfied with the current situation. This is not just about pensioners, it is about all of us, and I am already predicting that action in this area will obviously have to be less soft on the part of the government,” Golob admitted that he was also disappointed by the food price rises. MP Jožef Jelen asked the government in a written parliamentary question what measures it intends to take in order to control food prices and limit price increases, and whether the government is also considering the possibility of regulating food prices.
Fuel is also getting more expensive
The government of Robert Golob started to intervene in the margins again shortly after the new year – in mid-January, it increased the margins for diesel and heating oil, preventing them from becoming cheaper, and a month ago, it lowered excise duties by increasing the price of raw materials, and 14 days ago, it raised them again, the newspaper Finance reported in mid-March. The latter also predicted that the price of petrol would continue with the upward trend we have been seeing since the beginning of the year – especially if the government does not cut excise duties. Then, on the 14th of March, petrol prices did rise, as was predicted. A litre of 95-octane petrol is 1.5 cents more expensive, at 1.374 euros over the 14-day period. A litre of diesel is also 1.5 cents more expensive, at 1.504 euros.