TIRANA, June 8 – Albania’s inflation rate hit a four-year high in the first five months of this year when it climbed amid higher food and oil prices to an average of 2.2 percent, up from 0.6 percent during the same period last year, according to state statistical institute, INSTAT.
The May inflation rate was at 2 percent, up from 0.7 percent a year ago, but yet below the central bank’s 3 percent target estimated to have a positive impact on the country’s economic growth.
Last January, Albania’s inflation rate hit a five-year high of 2.8 percent fuelled by a hike in fuel and liquid gas prices and one of the coldest months in three decades paralyzing the country and causing huge damage to greenhouse crops.
The pickup in inflation rate in the first five months of this year is mainly a result of a recovery in international oil and food prices rather than an increase in domestic consumption.
Oil prices currently stand at about $50 a barrel, up from up from a 12-year low of $30 a barrel in early 2016. Meanwhile, the FAO food price index, a measure of the monthly change in international prices of five commodity groups, was up by an annual 10 percent last May, affecting Albania as a net importer.
Albania’s annual average inflation rate hit a 16-year low of 1.3 percent in 2016, reflecting a slump in global oil and food prices, but also sluggish domestic consumption as the economy is estimated to have grown by slightly above 3 percent, mainly thanks to major energy-related investment.
The country’s inflation rate was on par with other Western Balkans enlargement countries and slightly above zero in the euro area.
Albania’s average inflation rate fluctuated at about 2 percent from 2012 to 2015 compared to 3 percent in 2007-2010.
The central bank, which due to low inflation pressure has been keeping the key rate at a historic low of 1.25 percent since May 2016, 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.
