Consumer Price Index, 102.4% Compared to December 2007

Tirana, 8 April 2008. The Albanian Institute of Statistics released its latest data on the Consumer Price Index (CPI), for March 2008. The Consumer Price Index increased 0.9 percent in March, or was up by 102.4 percent compared to December 2007 (December 2007= 100). The annual rate in March is 4.6 percent. The annual rate for the previous year was 2.7 percent.
The “Food and non-alcoholic beverage” index increased 0.7 percent in March, having an impact of 0.3 percentage points in monthly changes. Within this group, the highest price increase, 4.8 percent, was noticed in the “fruits” subgroup. INSTAT points out that the price increase for the “fruits” subgroup reflects the price increases for kiwi (16.9 percent), apple (5.4 percent), oranges (4.4 percent), banana (3.7 percent), and others. The “vegetables including potatoes” subgroup index increased 1.0 percent in March. It is worth mentioning that the price increase for cauliflower was 31.4 percent, for cabbage 24.6 percent, and for tomatoes 10.5 percent. In March, prices increased for other subgroups of this group, also. For instance, the price increase in March for the subgroup “fat and oil” was 0.5 percent, for the “bread and cereals” subgroup was 0.5 percent, and for the subgroup “fish” was 1.2 percent. Meanwhile, the prices in subgroup “milk, cheese and eggs” decreased by 0.5 percent.
The index of “Clothing and footwear” group decreased 0.8 percent, having a negative impact by 0.04 percentage points in monthly results for March.
The index of “Rent, water fuel and power” increased by 3.8 percent, having an impact of 0.6 percentage points in monthly results for March. Notably, the price of electricity in March increased by 23.7 percent.
The “Transport” group index increased by 0.8 percent in March. Its impact on the monthly changes was 0.05 percent percentage points. In March, the price of diesel increased by 1.4 percent and the price of petrol increased by 0.5 percent.
The price increase for other groups varied from + 0.1 percent to + 0.3 percent.
Surprisingly, INSTAT never mentions the word “inflation” in its press release. However, for the layman, Tirana Times explains that inflation is caused by the increase of money supply relative to the growth of production capacity for goods and services. Inflation is measured by calculating the percentage rate of change of a price index, which is called the inflation rate. Consumer Price Index (CPI) is probably the oldest and the most common price index used to measure inflation. The simple interpretation of the data provided by INSTAT is as follows: The annual inflation rate for the period March 2007- March 2008 is 4.6 percent, while for the period March 2006- March 2007 was only 2.7 percent, well inside the four percent goal set by the Bank of Albania.
However, INSTAT should be praised for including in its Consumer Price Index some basic food items for the Albanians, such as kiwi or cauliflower. Once again, Tirana Times encourages INSTAT to include broccoli in its next CPI.