Albania's consumer price inflation eases to 2.1% y/y in May 2013.

By bne IntelliNews June 7, 2013

Albania’s consumer prices increased by 2.1% y/y in May 2013, slowing down from a 2.3% annual rise in April, the statistics institute, INSTAT, said on its website. The growth, however, was above the 1.9% y/y rate recorded in May 2012. In monthly terms, consumer prices declined by 1% in May after edging down by 0.1% m/m in April.
Food prices increased by an annual 4.9%, continuing its upward trend from the past five months. The growth was mainly driven by a 28.6% rise in vegetable prices and an 5.7% y/y increase in prices of fruits. Prices of alcoholic beverages and tobacco went up 4.3% y/y in May after advancing 3.5% y/y in the previous month. Communications and education services costs grew by 1.3% and 1.8% y/y, respectively, advancing at the same pace as in the previous four months. Costs of transport reversed to a 0.5% y/y rise, which resulted from a 0.9% y/y growth in the costs of both equipment operations of personal transportation and transportation services. By contrast, lower prices of clothing and footwear (down 3.6% y/y) continued to exert downward pressure on the inflation. Regulated prices registered a 1% y/y drop in the month.

In our estimates, the average inflation rate was equal to 2.4% in January to May 2013, up from 1.3% in the same period of 2012.

The central bank decided on May 29 to keep the base interest rate at its historic low of 3.75% for a fourth consecutive month after cutting it by 25bps in January. The decision is in line with the objectives to meet the mid-term inflation target, while providing necessary stimulus to support lending growth and consumption.

Consumer prices, % y/y            
  May-12 Jan-13 Mar-13 Apr-13 May-13 Jan-May 2013
TOTAL  1.9 2.7 2.4 2.3 2.1 2.4
Food and Drink  1.9 4.4 5.6 5.7 4.9 5.1
Alcohol and Tobacco  1.2 3.8 3.6 3.5 4.3 3.8
Clothing and Footwear  -2.0 -3.1 -3.4 -3.4 -3.6 -3.4
Rent and Utilities    1.3 0.3 -0.5 -0.9 -1.0 -0.5
Furniture and Maintenance  1.6 1.3 1.3 1.2 0.7 1.2
Healthcare  3.5 1.4 1.1 0.1 0.1 0.8
Transportation  4.1 1.5 -0.7 -0.3 0.5 0.3
Communication  -0.1 1.3 1.3 1.3 1.3 1.3
Recreation and Culture  1.8 1.7 0.8 0.3 0.4 0.9
Education  1.5 1.8 1.8 1.8 1.8 1.8
Hotels and Restaurants  1.9 1.9 1.7 1.8 1.5 1.8
Others  5.9 7.5 -3.5 -3.6 -3.6 0.2
Source: INSTAT            

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