Albania’s CPI inflation speeds up to 2.3% y/y in June 2013

By bne IntelliNews July 9, 2013

Albania’s consumer prices increased by 2.3% y/y in June 2013, speeding up from a 2.1% annual rise in May, the statistics institute, INSTAT, said on its website. The growth was also above the 2.2% y/y rate recorded in June 2012. In monthly terms, consumer prices declined by 0.6% in June, slower than the 1% m/m drop in May.

The overall trend was again determined by food prices, which grew 5.4% y/y, speeding up from 4.9% y/y in May. The growth was mainly driven by a 30.6% rise in vegetable prices and a 10.7% y/y increase in prices of fruit.

Prices of alcoholic beverages and tobacco went up 4.1% y/y in June after advancing 4.3% y/y in the previous month. Communications costs grew by 1.3% y/y advancing at the same pace as in the previous five months.

Costs of education services increased 2.2% on the year. Prices of transport grew by 1% y/y as a result from 1.4% 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 4.5% 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 2.4% in January to June 2013, up from 1.5% in the same period of 2012.

The central bank decided at its latest meeting on June 26 to keep the base interest rate at its historic low of 3.75% for a fifth 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              
  Jun-12 Jan-13 Mar-13 Apr-13 May-13 Jun-13 H1 2013
TOTAL  2.2 2.7 2.4 2.3 2.1 2.3 2.4
Food and Drink  2.7 4.4 5.6 5.7 4.9 5.4 5.2
Alcohol and Tobacco  1.1 3.8 3.6 3.5 4.3 4.1 3.9
Clothing and Footwear  -2.3 -3.1 -3.4 -3.4 -3.6 -4.5 -3.5
Rent and Utilities    1.3 0.3 -0.5 -0.9 -1.0 -0.5 -0.5
Furniture and Maintenance  1.6 1.3 1.3 1.2 0.7 0.5 1.1
Healthcare  3.2 1.4 1.1 0.1 0.1 -0.1 0.6
Transportation  3.2 1.5 -0.7 -0.3 0.5 1.1 0.5
Communication  -0.1 1.3 1.3 1.3 1.3 1.3 1.3
Recreation and Culture  2.1 1.7 0.8 0.3 0.4 0.4 0.9
Education  1.4 1.8 1.8 1.8 1.8 2.2 1.9
Hotels and Restaurants  1.9 1.9 1.7 1.8 1.5 1.9 1.8
Others  6.0 7.5 -3.5 -3.6 -3.6 -1.6 -0.1
Source: INSTAT              

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