TIRANA, Sept. 9 – Albania’s inflation rate accelerated to 1.9 percent in August 2015, up from a record low of 1.3 percent last July, remaining below the central bank’s 3 percent target since October 2011, in a situation hinting sluggish consumption and demand.
Data published by the country’s state statistical institute, INSTAT, shows the inflation rate accelerated on higher food and non-alcoholic beverage prices, the key item in the consumer basket, which grew by 4.2 percent year-on-year. Food and non-alcoholic beverages contributed by 1.65 percent in the annual inflation rate last August compared to 0.24 percentage point contribution by “alcoholic beverages and tobacco” and 0.15 percentage points for the education services.
INSTAT data shows diesel and petrol prices dropped by 2.1 percent and 1.7 percent respectively compared to July 2015.
In total, inflation rate during the first eight months of this year has grown by 1.8 percent, almost the same compared to the same period last year.
“From a macroeconomic point of view, the slow increase in prices reflects the impact of sluggish aggregate demand and relatively low prices in global markets,” says central bank governor Gent Sejko.
“Average inflation rate in 2015 is expected to fluctuate at about 2 percent. Forecasts by the Bank of Albania suggest that the inflation rate will continue increasing in the next couple of years and sustainably return to our 3 percent target at the end of 2017,” says Sejko.
The Albanian government expects the inflation rate to accelerate to 2.1 percent in 2015 after it hit a 15-year low of 1.6 percent in 2014, hinting sluggish demand and private investments.
Albania’s central bank estimates that by preserving the inflation rate at around the 3 percent rate, the monetary policy will continue having a positive contribution to the development of the Albanian economy.
The Albanian government and international financial institutions such as the IMF and the World Bank expect the country’s economy to accelerate to 3 percent this year, up from around 2 percent in 2014.
