Albania’s CPI inflation eases to 1.2% y/y in August 2013.

By bne IntelliNews September 9, 2013

Albania’s consumer prices increased by 1.2% y/y in August 2013, slowing down for the second consecutive month from 1.6% y/y in July, and 2.3% y/y in June, the statistics institute, INSTAT, informed. The growth was also lower than the 2.8% y/y rate recorded in August 2012. In monthly terms, consumer prices edged down by 0.1% in August, following a 0.8% m/m drop in the previous month.

The overall trend was again determined by food prices, which grew 2.8% y/y, easing from 4% y/y in July. The growth was mainly driven by a 14.8% y/y increase in fruit prices and an 8.4% rise in vegetable prices. Costs of the two categories eased from 19.4% y/y and 11.7% y/y in July 2013.

Prices of alcoholic beverages and tobacco increased by 3.9% y/y in August advancing slower than July’s rise of 4.1% y/y. Communications costs grew by 1.3% y/y slightly faster than in the previous month.

Education charges increased by 2.2% on the year. Prices of transport advanced by 0.3% y/y reflecting a 1.4% y/y growth in the costs of transportation vehicles.

On the other hand, lower prices of clothing and footwear (down 3.8% y/y) continued to exert downward pressure on the inflation. Regulated prices registered a 0.5% y/y drop in the month as well.

In our estimates, the average inflation rate was equal to 2.1% in January to August 2013, up from 1.8% in the same period of 2012.

The central bank decided at its latest meeting on August 28 to keep the base interest rate at the historic low of 3.50% after cutting it by 25bps in July. 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            
  Aug-12 May-13 Jun-13 Jul-13 Aug-13 Jan-Aug 2013
TOTAL  2.8 2.1 2.3 1.6 1.2 2.1
Food and Drink  4.2 4.9 5.4 4.0 2.8 4.7
Alcohol and Tobacco  1.1 4.3 4.1 4.1 3.9 3.9
Clothing and Footwear  -2.3 -3.6 -4.5 -4.4 -3.8 -3.7
Rent and Utilities    1.4 -1.0 -0.5 -0.5 -0.5 -0.5
Furniture and Maintenance  1.5 0.7 0.5 0.4 0.5 0.9
Healthcare  3.2 0.1 -0.1 -1.0 -1.5 0.2
Transportation  4.4 0.5 1.1 0.5 0.3 0.5
Communication  -0.1 1.3 1.3 1.2 1.3 1.3
Recreation and Culture  2.2 0.4 0.4 0.9 0.8 0.9
Education  1.4 1.8 2.2 2.2 2.2 1.9
Hotels and Restaurants  1.9 1.5 1.9 2.1 2.7 1.9
Others  5.9 -3.6 -1.6 -2.4 -2.0 -0.7
Source: INSTAT            

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