Inflation at BoA’s target of 2%: Food’s prices increasing, fuel on a standstill
Inflation for May increased slightly to 2% after falling for three consecutive months.
According to data released from the Institute of Statistics, the slight fluctuation from the level of 1.9% in April shows that inflation has found some sort of stability close to the bottom borderline of the Bank of Albania target.
Seen from a longer comparison perspective, inflation has shown a clear upward trend, given that the previous year it was at 0.7%.
The main contribution to inflation continues to be the group of food, which in May recorded an inflation increase of 3.8%, from 3% in April.
Products with the highest rise in prices compared to the previous year are fruits, vegetables, sugar, eggs and dairy products.
Growth in food products, however, was balanced by a decline in the group of “Transportation”, where inflation fell to 2.6%, from 4.3% in April.
The fall in inflation in this group is owed mainly to a slight decline in retail fuel prices.
In its latest forecast, the Bank of Albania expects inflation for this year to be 2.3%, with a significant increase from the 1.3% reported last year.
The gradual growth of inflation is supported by the recovery of domestic demand, but also by improvements in the external economic environment, followed by higher raw material prices and rising inflation.
However, a factor that is counterproductive in inflation is the strengthening of the Lek against the main currencies and especially against the euro.
Lek’s appreciation against the euro alleviates the pressure of rising prices from imported goods.
SCAN
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