Inflation in January 1, 2%

Annual inflation rate in BH in January 2007, in comparison with the same month of the last year, is 1, 2 %.

This represents a significant decrease in comparison to the values during 2006, which were between 6% and 8%. The reason for this decrease is the elemination of the effect caused by the Valued Added Tax (VAT), since the introduction of this tax caused the price increase at the begining of the last year.

Even before the VAT was introduced, the Central Bank of Bosnia and Herzegovina (CBBH) stressed that the VAT would caused only a one-time price increase and that there was no reason for extended inflationary pressures.

If no large changes in price of oil occur, it is very likely that during 2007, inflation in BH will be at the level recorded before 2006, and it will be close to the inflation in the Euro Zone, and somewhat lower a in the countries of the region.