Albania’s consumer prices increased by 1.6% y/y in July 2013, slowing down from a 2.3% annual rise in June, the statistics institute, INSTAT, said on its website. The growth was also lower than the 2.7% y/y rate recorded in July 2012. In monthly terms, consumer prices declined by 0.8% in July, faster than the 0.6% m/m drop in the previous month.
The overall trend was again determined by food prices, which grew 4% y/y, slowing down from 5.4% y/y in June. The growth was mainly driven by a 19.4% y/y increase in prices of fruits and a 11.7% rise in vegetable prices.
Prices of alcoholic beverages and tobacco went up 4.1% y/y in July advancing on the same pace as in June. Communications costs grew by 1.2% y/y slightly slower than in the previous month.
Education charges increased by 2.2% on the year. Prices of transport grew by 0.5% y/y as a result from 1.6% y/y growth in the costs of transportation vehicles.
On the other hand, lower prices of clothing and footwear (down 4.4% 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 2.3% in January to July 2013, up from 1.7% in the same period of 2012.
The central bank decided at its latest meeting on July 31 to cut the base interest rate by 0.25pps to a historic low of 3.50% after keeping it unchanged since the start of the year. 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|
|Food and Drink||4.1||5.7||4.9||5.4||4.0||5.0|
|Alcohol and Tobacco||1.2||3.5||4.3||4.1||4.1||3.9|
|Clothing and Footwear||-2.7||-3.4||-3.6||-4.5||-4.4||-3.7|
|Rent and Utilities||1.3||-0.9||-1.0||-0.5||-0.5||-0.5|
|Furniture and Maintenance||1.5||1.2||0.7||0.5||0.4||1.0|
|Recreation and Culture||1.7||0.3||0.4||0.4||0.9||0.9|
|Hotels and Restaurants||1.8||1.8||1.5||1.9||2.1||1.8|
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