Inflation rate returns within BoA target

TIRANA, July 12 – The inflation rate returned within the Bank of Albania’s target band in June 2011 after remaining above the 3ѱ percent target for four consecutive months. INSTAT data show the Consumer Price Index was up 3.9 percent year-on-year in June 2011, registering a drop of 1.1 percent compared to the previous month.
Domestic production continued to positively contribute to the inflation rate “especially the vegetables including potatoes” subgroup whose prices fell by around 20 percent compared to the previous month. Meanwhile, fuel prices dropped by 0.6 percent.
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. In March 2011, the annual inflation rate was at 4.3 percent compared to 4.1 percent in April 2011 and 4.2 percent last May.
Last March, 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 historic levels– for the past 8 months. Governor Ardian Fullani said the move was aimed at keeping inflation rates in check following a sharp rise in consumer prices.
The Bank of Albania says the inflation rate, which during the first five months of this year has been up to 4.5 percent exceeding the central bank’s target by 0.5 percent, will return to normal rates by the end of this year.
Central bank governor Ardian Fullani said in a recent press conference that the inflation rate is expected to get back to the central bank’s 3ѱ target band by year-end explaining that “the effect of the shocks of foreign prices will wane while the effect of administered prices will cease in the third quarter.”