Vegetable production lowers inflation rate to 3.1%

TIRANA, June 8 – Albania’s Institute of Statistics (INSTAT) announced that the consumer price index, CPI, increased 3.1 percent year-on-year last May, down from 3.5 percent in April registering the third drop in a row. One year earlier, the CPI was up 2.1 percent. The decrease is mainly dedicated to domestic production, especially that of vegetables whose prices fell by 17.5 percent in May 2010. Cucumber, pepper and tomato prices fell by 37, 26 and 31 percent, respectively, according to INSTAT data.
Diesel and petrol prices continued rising even in May with 2.3 and 2.1 percent, respectively, said the Institute of Statistics.
Tobacco prices rose by 0.8 percent while alcoholic drink prices went up 0.4 percent. Medicine prices also increased by 1.7 percent.
Meanwhile, slight price decreases were registered for milk, cheese and eggs and sugar.
The 3.1 percent inflation rate returns inflation within the central bank’s 3 percent target, plus/minus 1 percent, registering the lowest rate during the first four months of this year.
The majority of price increases in non-food products are related to the depreciation of the national currency, Lek, which has lost 10 percent against the Euro and around 20 percent against the US dollar during the past year, experts say.
Last February, the inflation rate registered a record 4.4 percent, exceeding the bank’s target by 0.4 percent mainly because of higher food and electricity prices.
The Bank of Albania has said inflationary trends are expected to fall during the second half of the year.
According to the International Monetary Fund, administrative price increases may drive headline inflation temporarily above the 3ѱ percent target band in the near term. However, underlying inflation is expected to remain well contained, and annual inflation is projected at 3.4 percent in 2010 and 3 percent in the medium term.