Albania’s CPI inflation eases to 1.6% y/y in July 2013.

By bne IntelliNews August 7, 2013

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            
  Jul-12 Apr-13 May-13 Jun-13 Jul-13 Jan-Jul 2013
TOTAL  2.7 2.3 2.1 2.3 1.6 2.3
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
Healthcare  3.2 0.1 0.1 -0.1 -1.0 0.4
Transportation  4.1 -0.3 0.5 1.1 0.5 0.5
Communication  -0.1 1.3 1.3 1.3 1.2 1.3
Recreation and Culture  1.7 0.3 0.4 0.4 0.9 0.9
Education  1.4 1.8 1.8 2.2 2.2 1.9
Hotels and Restaurants  1.8 1.8 1.5 1.9 2.1 1.8
Others  6.0 -3.6 -3.6 -1.6 -2.4 -0.5
Source: INSTAT            

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