Price asset, competition, market paradox in Kosovo
From Nazmi Jusufi economics expert
One of the most significant paradoxes of the market economy is that increasing costs is often quickly conveyed to the consumer, while their reduction is not reflected at the same pace in final prices. This phenomenon, known in economic literature as asymmetric delivery of prices, raises an essential issue: is competition functioning effectively, or the benefits of improving economic conditions remain largely in the links of the supply chain?
Of course, not every unchanged price proves abuse and not every difference between cost and sale price represents excessive profit. Inventors bought at higher prices, supply contracts, transport, energy, wages and operational spending could justify a gradual adjustment. However, when costs drop steadily and prices remain high over an extended period, economic reasoning requires more than general justification: it requires data, transparency and market structure analysis.
The problem is not just price levels, it’s how they form. In a competitive market, companies have continued incentives to improve efficiency, lower costs and offer more favourable prices because the consumer can choose the best option. When competition is poor, alternatives are limited or the entrance of new operators is hampered, the pressure to convey savings to the consumer may be reduced. Under these circumstances, the benefits of lowering costs can be partly absorbed by commercial margins rather than reflected in final prices.
Here lies the difference between a market that functions formally and a market that actually functions in consumer interest. Gaining is the legitimate element of the market economy, but competition must ensure that it does not secede from efficiency, innovation and economic value creation.
For Kosovo, this issue is directly related to purchasing power and social welfare. In an economy where families need to cover expenses for food, energy, housing and transport, any unwarranted delay in conveying lower costs could burden the family budget.
Moreover, slowing inflation does not necessarily mean lowering prices. It can only show that prices are rising more slowly, while their level remains high. If income does not move at the same pace as basic spending, citizens’ purchasing power continues to be under pressure.
For this reason, the economic debate in Kosovo should not be limited to publishing prices or in statements that the market defines them. A systematic monitoring mechanism is needed that compares import prices, transportation costs, retail and capital prices. Products such as bread, milk, food oil, flour, and fuel can serve as a starting point to evaluate how quickly and to what extent the changes in costs are transmitted to the consumer.
Such an analysis should accurately distinguish the real costs, trade margins and net profit, avoiding both unsupported accusations against businesses and admission without verifying any justification for high prices. If data shows signs of limiting competition or forbidden practices, competent institutions should intervene in accordance with the law and on the basis of evidence.
However, the solution does not lie in arbitrary price control. Unprecedented interventions can create new deviations, discourage supply and damage market functioning. The most stable approach is to strengthen competition, transparency of the supply chain, facilitate the entry of new operators, and effective supervision of trade practices.
Thus, the market should be judged not only by freedom to set prices but also by the ability of competition to protect consumer interest.
When costs increase, businesses have the right to adjust prices according to real economic conditions. But when costs are reduced, it is equally legitimate for citizens and institutions to seek explanation for the lack or delay of price cuts.
This is not a fight against business, nor is it a denial of the right to profit; it is a requirement for transparency, accountability and fair competition.
Kosovo needs a market where economic success is not measured only by enterprise profits, but also by efficiency, the quality of supply and the real benefit of consumers. Because an economy cannot be considered fully functional if improved supply conditions do not create real opportunities to improve the welfare of citizens.
The basic question, then, is not just why prices rise quickly and fall slowly, but who take advantage of lowering costs and why this profit does not always reach the consumer. Answering it is an important test of competition, institutional efficiency and economic justice in Kosovo. /Telegraphy.