Agriculture ministry experts had warned lower domestic production of vegetables due to the floods last February will increase reliance on imported products which are 10 to 15 percent more expensive
TIRANA, April 9 – Albania’s inflation rate slightly decelerated to 2.2 percent last March after hitting a 20-month high of 2.3 percent in February 2014 when severe floods caused considerable damage to local crops, according to INSTAT.
At 2.2 percent, the inflation rate continues remaining below the central bank’s 3 percent target, estimated to positively contribute to economic growth, since October 2011, hinting sluggish consumption and private investments.
Agriculture ministry experts had warned lower domestic production of vegetables due to the floods last February will increase reliance on imported products which are 10 to 15 percent more expensive.
The flooding in southern Albania in early February caused considerable damage to agriculture, livestock, houses and businesses and local infrastructure, estimated at millions of euros. The situation could also prompt a slight review downward of the GDP growth for 2015, expected at 3 percent, the central bank has warned.
Food and non-alcoholic beverage prices, the key item in the consumer basket, had the biggest 1.84 percentage point impact on the annual increase of consumer prices last March. Within this group, “vegetables including potato” prices were up by 13.8 percent year-on-year, while fruit prices grew by 14.6 percent, says INSTAT.
Educational services registered the highest annual growth of 10.3 percent in February 2015 fuelled a hike public universities fees last October. Alcoholic beverages and tobacco were up by 6.3 percent fuelled by 6.3 increase in cigarette prices due to higher excise duty. The biggest price declines were reported in the health and transport groups at 4.4 percent and 2.2 percent respectively.
Annual inflation rate hit a 15-year low of 1.6 percent in 2014, standing 0.4 percent below the central bank’s lower target limit and 1.4 percent below its target of 3 percent, according to data published by the country’s state statistical institute, INSTAT. The situation hints sluggish demand and private investments, the two key drivers of the Albanian’s growth, at a time when the economy has been suffering sluggish growth rates of 1 to 2 percent in the past three years.
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.
