TIRANA, Oct. 12 – Albania’s inflation rate hit a 16-year low of 1.1 percent in the first three quarters of this year, affected by record low oil and food prices but also sluggish domestic consumption as the economy is slowly recovering to 3 percent.
Data published by the country’s state statistical institute, INSTAT, shows Albania’s inflation rate rose by an average of 1.1 percent in the first three quarters of this year, significantly below the central bank’s 3 percent target estimated to have a positive impact on consumption.
The last time the inflation rate for the first three quarters was lower than 1.1 percent was back in 2000 when consumer prices were at modest negative growth rates following hyperinflation fuelled by the collapse of several pyramid investment schemes in 1997 triggering turmoil in the country.
The annual inflation rate slightly dropped to 1.8 percent last September, down from 2 percent last August, the peak of the tourist season, and record lows of 0.2 to 0.3 percent in early 2016 when deflation concerns emerged.
The September inflation rate was fueled by an annual 3.7 percent increase in food and non-alcoholic beverage prices, the key item in the consumer basket.
The Eurozone and regional countries have also been facing record low inflation rates this year fuelled by a sharp cut in international oil and food prices.
The low inflation pressure has allowed the central bank to cut the key rate to a historic low of 1.25 percent in a bid to boost sluggish consumption, but its easier monetary policy has been poorly reflected as lending continues remaining at modest negative growth rates affected by non-performing loans at about 20 percent.
The central bank says the gradual recovery of the Albanian economy will also lead to a gradual recovery in consumer prices and inflation rate is expected to pick up to its 3 percent target by late 2018.
