Inflation unchanged at 2.1% for May
Inflation didin’t experience any change in May, remaining close to the lower target of the Bank of Albania.
According to INSTAT data, the annual growth of the consumer price index was 2.1%, at the same level as in April.
This is the fourth consecutive month that inflation lies between the level of 2% and 2.1%.
Detailed by groups of goods, inflation fell for food and clothing groups, while this decline was offset by higher inflation in the transport group, largely determined by rising fuel prices.
This balancing caused the inflation average not to change from April, while last month’s measurements indicate that returning inflation to target will be more difficult than the previous forecasts of the Bank of Albania.
The Central Bank has postponed the comaback to the target to 2019.
Along with the lack of full use of the economy’s growth capacities, inflation is increasingly constrained by factors that are not related to demand.
An increasing impact has been the appreciation of the ALL against the euro, which has neutralized external pressures on price increases.
For this reason, the Bank of Albania decided on Wednesday to lower the key interest rate to the historic minimum of 1%, while announcing the launch of operations for buying the euro, with the aim of depreciating the Lek in the exchange rate.
The intervention of the Bank of Albania is quickly producing effects and in the last two days the European currency has won over three points in the exchange rate with the lek.
On Friday, the euro was exchanged for about 127.6 ALL.
If the return of the euro will be stable, this may be an influencing factor for inflation in the coming months.
SCAN
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