Inflation eased slightly in June following the increase recorded in May. The Institute of Statistics (INSTAT) announced that the Consumer Price Index change in June was 4.5%, down from 4.7% in May and 4.6% in April.

Despite the slight decrease in June, the trend of price contraction is much slower than in the eurozone. Earlier, Eurostat reported that inflation in the 20 eurozone countries dropped to 5.5% this month from 6.1% in May.

The decrease in energy prices has “calmed” inflation in the eurozone, while in Albania, it is decreasing at a slower pace due to the impact of food products, which, besides being expensive, also have a much higher share in the food budget (42%) compared to the European average of 13%.

According to INSTAT, the annual price increase in June was primarily influenced by the “Food and non-alcoholic beverages” group with +3.63 percentage points.

The Bank of Albania decided to keep the base rate unchanged at 3% in its latest meeting. The base rate is the key instrument used by the central bank to combat inflationary pressures.

Bank Governor Gent Sejko stated that inflation has declined, mainly reflecting the decrease in imported inflation and the depreciation of the euro.

However, he added that internal inflationary pressures remain high, reflecting the high demand for goods and services, tight labor market conditions, and rapid wage and labor cost increases.

• Inflation

The Consumer Price Index in June 2023 reached 114.0 compared to December 2020.

The annual change in the consumer price index in June 2023 is 4.5%, compared to 7.4% a year ago.

The monthly change in the consumer price index in June 2023, compared to May 2023, is -0.3%.

• The major groups’ influence on the annual change in the consumer price index

The annual price increase in June was mainly influenced by the “Food and non-alcoholic beverages” group with +3.63 percentage points, followed by the “Furniture, household appliances, and home maintenance” group with +0.45 percentage points.

Prices of the “Rent, water, fuels, and energy” group increased by +0.40 percentage points. Prices of the “Recreation and culture” group increased by +0.24 percentage points.

Prices of the “Hotels, cafes, and restaurants” and “Miscellaneous goods and services” groups increased by +0.22 percentage points each. Prices of the “Alcoholic beverages and tobacco” group increased by +0.18 percentage points.

Prices of the “Clothing and footwear” group increased by +0.16 percentage points. Prices of the “Education services” group increased by +0.06 percentage points. Prices of the “Health” group increased by +0.05 percentage points. Prices of the “Communication” group contributed +0.04 percentage points. Prices of the “Transport” group decreased by -1.13 percentage points.

Annual changes in major groups: Compared to June 2022, the largest price increases are observed in the “Food and non-alcoholic beverages” and “Recreation and culture” groups, both with 10.3%, followed by the “Furniture, household appliances, and home maintenance” group with 6.2%, “Hotels, cafes, and restaurants” with 4.8%, “Clothing and footwear” with 4.4%, “Miscellaneous goods and services” with 4%, “Alcoholic beverages and tobacco” with 3.7%, “Education services” with 2.2%, “Rent, water, fuels, and energy” with 2.1%, “Communication” with 1.4%, and “Health” with 1.2%.

On the other hand, prices of the “Transport” group decreased by 16.2%. Within the food group, prices of the subgroup “vegetables including potatoes” increased by 26.1%, followed by subgroups “milk, cheese, and eggs” with 14.4%, “meat” with 10.9%, “fruits” with 9.6%, “fish” with 9%, “sugar, jam, honey, chocolate, and confectionery” with 4.3%, “bread and cereals” with 4%, etc.

Monthly changes in major groups: Compared to May 2023, prices of the “Food and non-alcoholic beverages” group decreased by 1.2%, followed by prices of the “Transport” group with 0.3%.

On the other hand, prices of the “Recreation and culture” group increased by 1.8%, followed by “Clothing and footwear” with 0.4%, “Furniture, household appliances, and home maintenance” and “Hotels, cafes, and restaurants” with 0.3% each, and “Miscellaneous goods and services” with 0.2%.