Inflation rate remains within 3% target

TIRANA, Nov.8 – Albania’s inflation rate continued remaining within the central bank’s 3ѱ percent target even last October. Data published by the country state Institute of Statistics this week, show annual inflation rate was up 3 percent in October 2011, meeting targets for the fifth month in a row after a hike in the first half of this year.
Lower domestic production led to a 6.9 percent increase in the “vegetable including potatoes’ group with vegetable prices rising by up to 31 percent.
INSTAT reports a 2.1 percent increase in timber prices and 0.8 percent rise in diesel and petrol prices compared to Sept. 2011.
INSTAT data prove that differently from what the government claims, the introduction of the 10 percent excise for medicines starting from February this year has increased their prices by up to 5 percent. The government claims the introduction of the VAT on medicines has lowered their prices and cut down on their smuggling. Data show medicine prices rose by 1.8 percent compared to last August.
Basic products such as bread, cooking oil and sugar have increased by up to 10 percent compared to a year ago, shrinking the budgets of thousands of poor households.
Tobacco prices have also registered a sharp 18 percent rise following the increase of the excise tax by 20 lek to 70 lek per packet starting from January 2011.
Inflation rate during the first half of this year was at 4.05 percent, exceeding the 3ѱ percent target by 0.05.
Central bank governor Ardian Fullani says the inflation rate is expected to get back to the central bank’s 3ѱ target band by year-end explaining that “the effect of the shocks of foreign prices will wane while the effect of administered prices will cease in the third quarter.”