Consumer prices in Kosovo (HICP definition, chart) increased by 1% in August after the 0.5% advance in July, thus reversing the entire 1% decrease accumulated in February to May, consequently reaching a new record high, according to data published by the statistics office.

The prices of energy and food keep growing, yet at slower rates compared to last year. However, in August 2023 the consumer price index in Kosovo was nearly 22% above the average 2019 level.

Kosovo adopted the euro as its de facto legal tender in 2002 despite the territory not being a member of the Eurozone or the European Union.

The annual inflation rate reached 3.2% y/y in August, after it had gradually eased from 12.1% y/y in December to 2.4% y/y in July.

In August alone, the price of transport (fuels, flight fares) contributed some 0.6pp to the 1% monthly inflation, with food (vegetables mainly) contributing 0.2pp.

Over the past year, however, the main inflation driver was the rising cost of food that advanced by +5.5% y/y (+19.3% y/y as of August 2022), contributing roughly 2pp to the overall 3.2% y/y inflation. In contrast, the price of transport dropped by 3.8% y/y making a negative 0.7pp contribution to overall inflation (on high base effects: +17.2% y/y as of August 2022).

The price of energy continued to increase, by 3.2% y/y as of August 2023 after the 16.7% y/y advance over the previous year (August 2021 to August 2022).

The consumer prices in Kosovo surged by 11.6% on average in 2022 (+12.1% y/y in December), while the net average wage edged up by only 3.2% y/y to €446. No high-frequency data on wages are published but they are not likely to have increased much more than the 1.3% ytd inflation accumulated in January-August.