Bank of Albania has managed to keep inflation stable, but exchange rate fluctuations and increases in energy and fuel prices are starting to take their toll as inflation went up from 2 percent in September 2009 to 3.6 percent in January 2010.
TIRANA, Feb. 9 – The start of 2010 is not looking good for prices in Albania, as inflation reached 3.6 percent in January, a 0.5 increase from December 2009 and 1.5 percent increase since January, a year ago, the country’s official statistical organization, Instat, said.
Bank of Albania has managed to keep inflation stable through the thick of the global financial crisis, but it might have finally caught up with Albania as exchange rate fluctuations and increases in energy and fuel prices start to take their toll, experts say.
It’s important to note that the January 2010 data does include the increase in electricity rates because the calculation of the energy price inflation rate will be done in February when the bills are paid. So the real figure might be closer to the central bank’s 4 percent ceiling for acceptable inflation.
Prices of goods have been in a steady increase since September 2009, when inflation was only 2 percent.
Instat’s Consumer Price Index, found the highest increase, by 8.2 percent, in the price of vegetables. But meat and other food items, which make up a large portion of spending in Albania, have gone up too.
Another fact has been the steady increase oil prices both domestically and internationally. Instat said it went up 1 percent in Albania last month. Currently, a liter of petrol costs 135 leks, while Diesel is sold at 133 leks per liter.
The Bank of Albania and the government have kept an eye on inflation but have said there has been no need to interfere so far.
However, the former governor of the Bank of Albania, Shk쭱im Cani, told the Albanian media that the government should review its budget expenditures as that will affect the performance of the local currency and its exchange rate.
“The exchange rate directly affects inflation, and stabilizing the rate is a measure to soften price growth,” Mr. Cani told Alsat television.
Experts say the heavy floods in northern Albania are also to blame increase in inflation, as the destruction of domestic production in the flood means increasing prices.
