June inflation rate at 3.2%

TIRANA, July 8 – Albania’s Institute of Statistics (INSTAT) announced that the consumer price index, CPI, increased 3.2 percent year-on-year last June, up from 3.1 percent in May registering a slight increase after several drops in a row. One year earlier, the CPI was up 2.3 percent. The low inflation rate is mainly attributed to domestic production, especially that of vegetables whose prices fell by 14.4 percent in June 2010. Pepper, aubergine and tomato prices fell by 36, 31 and 30 percent, respectively, according to INSTAT data. Meanwhile, fruit prices registered a slight increase of 1.3 percent.
Diesel and petrol prices continued rising even in June with 0.2 and 0.3 percent, respectively, increasing the cost of transport services by 0.1 percent.
Tobacco prices rose by 0.3 percent while alcoholic drink prices went up 0.7 percent.
The health index registered a 6.6 percent growth with medical services for uninsured patients, measured for the first time by INSTAT based on data from the Health Insurance Institute, rising by a record 46.6 percent.
The 3.2 percent rate continues keeping the inflation rate within the central bank’s 3 percent target, plus/minus 1 percent, registering one of the lowest rates during the first half of this year.
The majority of price increases in non-food products are related to the depreciation of the national currency, Lek, which has lost 10 percent against the Euro and around 20 percent against the US dollar during the past year, experts say.
Last February, the inflation rate registered a record 4.4 percent, exceeding the bank’s target by 0.4 percent mainly because of higher food and electricity prices.
According to the International Monetary Fund, 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 well contained, and annual inflation is projected at 3.4 percent in 2010 and 3 percent in the medium term.