Latest data published by the country’s Institute of Statistics show the Consumer Price Index (CPI) was up 4.3 percent in March 2011 year-on-year, exceeding the central bank’s target band by 0.3 percent
Tirana Times
TIRANA, April 11 – Inflation rate continued remaining high even in March 2011, despite a considerable drop in vegetable prices because of domestic production. Latest data published by the country’s Institute of Statistics show the Consumer Price Index (CPI) was up 4.3 percent in March 2011 year-on-year, exceeding the central bank’s target band by 0.3 percent. Compared to February 2011, the CPI was down 0.1 percent mainly because of the ongoing rise in oil, fruit and bread prices. In March 2010, the CPI was up 4.1 percent.
Compared to last February, the biggest increase was reported in diesel and petrol prices which grew by 4.2 percent and 3.7 percent respectively. Rental prices also grew by 1.3 percent while medicine prices were up only 0.5 percent.
After a rising trend that went on for several months, the “food and non-alcoholic drinks for the first time dropped by 0.7 percent in March mainly thanks to lower vegetable and potato prices which dropped 7.7 percent compared to last February. Domestic production lowered tomato, spinach and cucumber prices by up to 30 percent. However, fruit prices were up by 4.5 percent with apple prices topping the list with a 12 percent increase. Clothes and footwear prices registered a slight 0.4 percent drop. No increase was reported in tobacco prices which ended their hike following the increase in excise tax.
INSTAT year-on-year data show consumer prices in March 2011 rose up to 21.6 percent for tobacco and 6.1 percent for food and non-alcoholic drinks. Oil and fat prices also rose 14.7 percent followed by sugar and confectionery with 10.7 percent.
Administered prices also underwent a significant increase with water supply tariffs up 29 percent year-on-year and hospital services rising by 11.8 percent compared to March 2010.
Meanwhile, clothes and footwear prices dropped by 1.5 percent reflecting the consumers’ saving trend during the whole of 2010.
The inflation rate was problematic only in the first three months of 2010 when it exceeded the central bank’s target by up to 0.7 percent with the February CPI hitting a record 4.7 percent year-on-year before dropping to 4.1 percent in March 2010 and continuing its declining trend until the end of the 2010.
The increase in some basic food prices such as bread, cooking oil, sugar and rice, but also liquid gas and fuel is making the life of average Albanians, especially pensioners, the unemployed and those who rely on falling remittances even more difficult in this beginning of 2011.
Starting from this year, Albanian consumers are also facing higher cigarette and medicine prices following a government decision to increase the tobacco excise tax by 20 lek per cigarette pack and impose a 10 percent VAT on medicines. The opposition Socialist Party blames the situation on monopolies close to government.
Few weeks ago, Albania’s central bank decided to raise the repo rate by 0.25 percentage points to 5.25 percent after keeping it unchanged at 5 percent, one of the lowest historical levels, for the past 8 months. Governor Ardian Fullani said the move was aimed at keeping inflation rate in check following a sharp rise in consumer prices last February. Data from the country’s Institute of Statistics show the Consumer Price Index (CPI) rose 4.5 percent year-on-year in February 2011, exceeding the central bank’s target band by 0.5 percent
The central bank says the inflation rate will be kept in check even this year, remaining within the central bank’s 3ѱ target following the 3.4 percent rate in 2010.
According to the International Monetary Fund, the baseline inflation outlook for Albania remains favourable. 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 under control, and annual inflation is projected at 3.5 percent in 2010 and 3 percent in the medium term, benefiting from the well entrenched credibility of the monetary policy framework
