IMPLICATIONS OF THE UKRAINIAN CRISIS ON THE ECONOMY AND BUDGET OF THE REPUBLIC OF SRPSKA

Abstract

The paper investigates the impact of the Ukrainian crisis on the economy and budget policy in the Republic of Srpska. In the absence of statistical series and due to the variability of key parameters, in circumstances when it seems that the established models of international economic flows are growing, for analysis we have in mind the comparison with historical experience, as the most appropriate descriptive, and methods of deduction and synthesis. There are two main channels through which the crisis spills over into the Serbian economy; rising prices and / or shortages of energy and food and a slowdown in the euro area. Energy and food security are endangered, especially due to the fact that domestic production covers only 60% of total food needs, and that the oil and gas sectors, which account for about 1/3 of energy consumption, are completely tied to Russia. Such circumstances have made the very assumptions of budget planning for 2022 questionable, primarily projected economic growth, employment and inflation rates. At the same time, the slowdown in the economy and the growth of energy and food prices without pursuing an active economic policy are leading to stagflation. The created budget is focused on debt repayment and social stability, but in the new circumstances and with indebtedness over 40% of GDP, it is inevitable that there must be a change in budget priorities, but also a waiver of budget spending wherever acceptable.