Albania’s producer prices index marks first increase in two years

Albania’s producer price index marked an increase for the first time in two years. According to data from the Institute of Statistics INSTAT, the annual change of the index in the last quarter of 2016 was 0.9%, returning to positive values ​​after eight quarters of decline.

The return to positive figures of the producer prices relates especially with the rising prices of raw materials in international markets, but also partly with the gradual improvement in domestic demand.

The producer price index measures the prices at which the products are issued by the manufacturers, while their performance is an important indicator of business health in a given country.

A reduction in producer prices means fewer incentives for enterprises to increase their production, employment and wages.

Producer prices serve also to indicate inflation trends in the near future. An increase in producer prices is usually accompanied with rising consumer prices.

According to INSTAT, the growth of producer prices touched the products intended for export, with 0.6%, as well as those products that are sold in the domestic market by 1.1%.

A determining role in the production price performance continues to be the mining industry and in particular that of oil.

According to INSTAT, the sales prices of crude oil rose by 8.3% on an annual basis, being instrumental in the growth component of the aggregate producer price index.

Meanwhile, the performance of manufacturing prices remains fragile. Prices in the processing industry resulted in decrease by 0.1% compared with a year ago.

Although still negative, the size of the decline is narrowing significantly, and the prices of industrial products used in the domestic market have marked an increase, by 0.5%.

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