Tirana Times
TIRANA, May 16 – The inflation rate has continued to remain above the Bank of Albania’s 3ѱ target even in April 2011, despite a falling trend evidenced in the previous two months. Latest data published by the country’s Institute of Statistics show that the Consumer Price Index (CPI) was up 4.1 percent in April 2011 year-on-year, exceeding the central bank’s target band by 0.1 percent. Compared to March 2011, the CPI was down 0.6 percent mainly due to the ongoing rise in oil, fruit, and bread prices. In April 2010, the CPI was up 3.7 percent. The lower inflation rate in April 2011 was a result of domestic production contribution which lowered vegetable prices by 12.6 percent. Compared to last March, the biggest increase was reported in fruit prices which rose by 4 percent. Apple, orange, and lemon prices increased by 6.5 to 8.8 percent respectively. Coffee, tea and cacao prices were up 4.1 percent. Oil prices also continued to rise with diesel and petrol prices up 2.4 percent and 0.2 percent respectively. Non-alcoholic beverages were also up 1.4 percent, followed by bread and fish prices by 1 percent. The food and non-alcoholic beverage sector dropped by 1.5 percent, while alcoholic beverages and tobacco rose 0.1 percent. Clothes and footwear prices registered a slight 0.3 percent drop.
INSTAT year-on-year data show consumer prices in April 2011 rose up to 20 percent for tobacco and 6.1 percent for “food and non-alcoholic drinks” group. Within this group, bread and cereal prices were up 15.7 percent, oil and fat prices 14.3 percent followed by fruit at 10.7 percent and “sugar and confectionery” with 10.6 percent. In the health group, medicine prices were up 6.7 percent while hospital services grew by 9.7 percent. “Clothes and footwear” was the only index group registering a decrease of 1.6 percent with women shoe prices down 8.9 percent year-on-year.
The increase in some basic food prices such as bread, cooking oil, sugar and rice, but also liquid gas and fuel is making the life of average Albanians, especially senior citizens, the unemployed and those who rely on falling remittances even more difficult since the beginning of 2011. Starting from this year, Albanian consumers are also facing higher cigarette and medicine prices following a government decision to increase the tobacco tax by 20 lek per cigarette pack and impose a 10 percent VAT on medicines. Last March, Albania’s central bank decided to raise the repo rate by 0.25 percentage points to 5.25 percent after keeping it unchanged at 5 percentدne of the lowest historic levelsנfor the past 8 months. Governor Ardian Fullani said the move was aimed at keeping inflation rates in check following a sharp rise in consumer prices last February. Data from the country’s Institute of Statistics show the Consumer Price Index (CPI) rose 4.5 percent year-on-year in February 2011, exceeding the central bank’s target band by 0.5 percent. Last March, the annual inflation rate was at 4.3 percent. The Bank of Albania says inflation rate during the first quarter of 2011 was at 4 percent, remaining in line with the central bank’s maximum limit. The rapid increase is a result of the rise in global food and oil prices affecting Albania which relies on the import of these products. In contrast, in 2010 the inflation rate was problematic only for the first three months during which it exceeded the central bank’s target by up to 0.7 percent with the February CPI hitting a record 4.7 percent year-on-year before dropping to 4.1 percent in March 2010 and continuing its decline until the end of 2010. The central bank says the inflation rate will be kept in check even this year, remaining within the central bank’s 3ѱ target following the 3.4 percent rate in 2010. 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 in the medium term, benefiting from the well entrenched credibility of the monetary policy framework.
