TIRANA, Dec. 9 – Food prices hit a four-year high of 6 percent in Nov. 2015 apparently fuelled by the nationwide campaign against informality which has sparked a moderate price increase due to increased costs following the formalization of thousands of businesses previously operating informally, according to state statistical institute, INSTAT.
Vegetables including potatoes prices also hit a record high of 36 percent in the food index.
Garment and footwear prices dropped by 4 percent year-on-year in Nov. 2015 hitting a 27-month low, and hinting poor demand due to rising food costs.
Albania’s inflation rate remained unchanged at 2.1 percent last November on a 5.9 percent increase in food and non-alcoholic beverages, the key item in the consumer basket.
Consumer prices are heading for a 1.9 percent increase this year, up from 1.6 percent in 2014 when it registered its lowest level in more than a decade.
At 1.9 percent, the inflation rate stands 1.1 percent below the central bank’s 3 percent target which is estimated to have a positive impact on the country’s growth, hinting sluggish demand.
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.
The Bank of Albania expects inflation rate to remain below its 3 percent target until early 2018 which will allow it to continue its easy monetary policy.
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.
The Albanian government and international financial institutions such as the IMF and the World Bank expect the country’s economy to accelerate to 2.7 percent this year, up from around 2 percent in 2014 on lower international oil prices affecting exports and spillover effects from the crisis in neighboring Greece.
