Inflation down to 2.1% in March; BoA data show that demand is improving

Inflation went slightly down in March to 2.1% from 2.2% that it had been in February.

According to data from the Institute of Statistics INSTAT, annual inflation continued its correction from the increase experienced in January, when it approached the level of 3%.

As it was expected, the increase in January proved temporary, linked especially with the unusual cold wave that brought a price increase of food products.

In February and March inflation went down gradually toward the levels of the logic of economic performance.

However, inflation is significantly higher compared to the same period a year earlier, when it was reported at the level of 0.3%.

Very low levels of inflation last year were influenced by temporary factors, but, however, the inflation trend is showing a gradual rise.

In the first three months of this year, inflation has floated above the lower 2% limit of the range of the central bank’s target.

The main contribution to inflation continues to come from the food group, but, however, the impact of this group in inflation is declining gradually.

A significant contribution to inflation in March came from the group “Rent, water, fuel and energy” and from the group “Transport”.

The reduction of inflation reliance on the food group may be a signal that domestic demand is improving.

Bank of Albania forecasts that in 2017 inflation will be close to 2.4%, up significantly from the level of 1.3% reported a year earlier.

The full comeback of inflation close to the target of 3%, according to the Bank of Albania, is expected to occur in the first half of next year.

SCAN

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