Inflation rate up 3.3% in January

TIRANA, Jan. 10 – Consumer prices in January 2011 registered a 0.8 percent increase compared to the last December mainly because of higher food and beverage prices but also fuel and liquid gas. Latest data published by the country’s Institute of Statistics (INSTAT) show the Consumer Price Index in January rose 3.3 percent year-on-year, remaining within the central bank’s 3ѱ percent target.
The highest increase was reported in the “alcoholic beverages and tobacco” group with cigarette prices rising by 10.6 percent following a government decision to increase the tobacco excise tax by 20 lek per packet, effective since January 1, 2011.
Second came the “transport” group with a 1.6 percent increase with diesel and petrol prices up 5.8 percent and 6.4 percent respectively compared to last December.
Third came the “food and non-alcoholic beverage” group whose index rose 1.2 percent compared to last December. The biggest increase within this group was reported in the “vegetables including potatoes” subgroup whose prices increased by 4 percent compared with the previous month.
‘Oil and fat’ prices also grew 2.3 percent with cooking oil up 4.6 percent. Sugar, bread prices also underwent increases of up to 2.5 percent.
INSTAT year-on-year data show consumer prices in January 2011 rose up to 18.6 percent for tobacco and 12 percent for alcoholic beverages. Oil and fat prices also rose 13.0 percent followed by sugar and confectionary with 11.1 percent.
Administered prices also underwent a significant increase with water supply tariffs up 28.8 percent year-on-year and hospital services rising by 10.4 percent compared to January 2010.
Meanwhile, clothes and footwear prices dropped by 1.7 percent reflecting the consumers saving trend during the whole of 2010.
The inflation rate was problematic only in the first three months of 2010 when it exceeded the central bank’s target by up to 0.7 percent with February CPI hitting a record 4.7 percent year-on-year before dropping to 4.1 percent in March 2010 and continuing its declining trend until the end of the 2010. Last November, Albania’s CPI registered its lowest year-on-year rate at 2.8 percent.
According to the International Monetary Fund, the baseline inflation outlook for Albania remains favourable. Administrative price increases may drive headline inflation temporarily above the 3ѱ percent target band in the near term. However, underlying inflation is expected to remain under control, and annual inflation is projected at 3.5 percent in 2010 and 3 percent in the medium term, benefiting from the well entrenched credibility of the monetary policy framework.