Following the conflict in Ukraine, European Union member states have been grappling with a notable surge in inflation, reaching unprecedented levels. In the EU, the average inflation rate for the past year was 9.2%, while in Albania, prices saw an average increase of 6.7% over the same period. As the aftermath of the war in Europe starts to subside, prices are now declining at a swifter pace than in Albania. Notably, in September, inflation, calculated using the Eurostat methodology in Albania, reached 4.9%, aligning with the levels observed in the EU.
By contrast, in February, harmonized inflation in Albania was 6.8%, while in the EU, it stood at 9.9%. Subsequently, prices in EU countries have been decreasing at a faster rate in comparison to Albania, where the price decrease has been notably slower. As a result, inflation indicators converged in September.
The persistently increasing prices in Albania can be attributed to the primary driver of inflation, which is food prices. In Europe, inflationary pressure mainly stemmed from energy costs. Albanian households, on average, allocate around 40% of their total expenditures to food, whereas the EU’s average is 13%.
Data derived from the Eurostat methodology indicates that the most substantial price increase, around 8.4%, is observed in the category of “Food and Non-Alcoholic Beverages”. On the other hand, the “Transport” category saw prices decrease by 3.9%.
For the month of September, the monthly change calculated from the Harmonized Index of Consumer Prices stood at 0.8%. This change was predominantly influenced by the notable rise in prices within the category of “Educational Services” at 3.4%.
Among the EU countries, Hungary experienced the most significant price increase of 12% in September, closely followed by Romania and Slovakia, each at around 8%. On the other hand, the Netherlands reported near-zero inflation in September, while Denmark and Belgium both had inflation rates of less than 1%.
In Albania, the food group witnessed prices rising at twice the rate of the price average throughout the year.
The expansion of export channels, the surge in tourist numbers, and limited production capacity, combined with the impacts of climate change, have laid the foundation for a new price norm for agricultural and livestock products. Operators across production, trade, and export sectors assert that prices of vegetables, fruits, dairy products, meats, and more are unlikely to reverse; instead, the data indicate a further upward trajectory.
Even the conventional inflation index showed an increase in September, reaching 4.1%, up from the 4% registered in August.
