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Albania economics highlights (week 31/2022)

Updated: Aug 21, 2022

Central Bank of Albania - Monetary Policy Decisions on August 3rd

The Supervisory Council of the Bank of Albania reviewed and approved the Quarterly Monetary Policy Report on August 3rd. Inflation remains the primary risk to the stable long-term growth of the economy.

The Supervisory Council decided to:

• Increase the policy rate by 0. 5 percentage points to 1.75%, from 1.25%;

• Increase the overnight deposit rate by 0.5 percentage points to 0.75%, from 0.25%.

• Increase the overnight lending rate by 0.5 percentage points to 2.75%, from 2.25%; and

Key areas mentioned during the press conference on monetary policy:

New data suggests that inflationary pressures are broader and stronger than previously assessed. The increase of inflation mainly reflected surging prices of food, oil, and transportation, however, inflation was present in other items of the CPI basket as well. The volume of economic activity grew by 6% in Q1 2022, and other indicators suggest a further growth in the second quarter.

Economic growth was driven by the expansion in households’ consumption, private sector investments, and in the exports of goods and services. The baseline scenario forecasts suggest that economic growth will remain in the positive territory over the medium-term horizon. Source: Bank of Albania

Inflation rate in Albania July 2022

The inflation rate in Albania continued its increase hitting 7.5% in July, the highest in 20 years, from 7.4% in June.

Prices rose the most within the transportation (19.7%) and food and non-alcoholic beverage group (13.2%), namely oil and fats (30.6%), bread and cereals (18.2%) and milk, cheese and eggs (15.4%). Other upward contribution came from cost of housing, water, electricity and other fuels (3.4%), furniture household goods and maintenance (4.2%) and hotels and restaurants (6%).

Compared to June, consumer prices increased 0.2%, after falling in the previous two months, with cost of housing and utilities (0.7%) and food (0.6%) rising the most. Source: INSTAT

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