bne IntelliNews – Albanian inflation remains on a modest upward path in April
Albania’s consumer price index remained on an upward trend in April with the index rising to 1.9% annually, the statistics office Instat reported on May 10. The index also rose 0.2% monthly.
The annual change in the CPI has increased since February after hitting a low of just 0.4% in January.
The largest contribution to the annual change in the CPI in April came from food and non-alcoholic beverages, which contributed 1.51 percentage points (pp) to the overall increase.
Compared with April 2020, prices increased the most for food and non-alcoholic beverages, by 4.5%, followed by communication (3.6%), alcoholic beverages and tobacco (1.7%) , leisure and culture (1.3%) and hotels, coffee shops and restaurants (1.0%). The annual price increase for other categories was less than 1%.
Compared to March 2021, the largest increase concerns leisure and culture (2.1%), followed by communications (1.3%). There was a slight drop in the prices of health and furniture, housewares and maintenance.
Albanian inflation has been low and constant in recent years. Last week, the supervisory board of Albania’s central bank, the Bank of Albania, decided to keep the key rate at 0.5%.
The interest rates on the overnight deposit facility and the overnight lending facility were also kept unchanged at 0.10% and 0.90% respectively.
Central bank governor Gent Sejko said on May 5 that the supervisory board considered the current accommodative monetary policy to be still adequate to support economic growth and the stable return of inflation to target.
Sejko also noted that “the monetary stimulus will benefit from maintaining the current form of unlimited injections of fixed-price liquidity into the banking sector, at least in the third quarter of this year.”
The bank will continue its accommodative monetary policy over the medium term. “Any timely normalization of monetary policy will be prudent, jeopardizing neither the stability of the economic recovery nor the prospects of inflation returning to target,” Sejko said.
According to the conclusions of the Supervisory Board, the balance of risks remains on the downside over the term – in particular due to a slower than expected movement of the epidemiological station, slower credit growth or a response slower for businesses and households to improve financial conditions – while forward risks appear to be more balanced.