From: Exit Staff
Cost of Living Soars by 7.4% in June, Highest in 20 Years

The cost of food products in Albania during June rose by 7.4% compared to May, demonstrating a significant increase from the same period in 2021 when the increase was just 1.6%.

Prices in Albania are now rising at a rate that is faster than any seen in the last 20 years. In June, every service and product was more expensive with the exception of entertainment and culture. The rise is driven by global inflation, rising energy and fuel prices, and the ongoing war in Ukraine, waged by Russia.

The impact of these rises is severe for Albanian families as according to INSTAT, 42% of a family’s income goes on food- the highest percentage in the region and Europe. After Albania, country’s with high rates of spending on food include North Macedonia (30.6%), Bosnia and Herzegovina (29.5%), Montenegro (24.5%) and Serbia (23.6%). With the current increases in costs, this percentage is likely to have risen even more while in the EU, it averages at 13%.

According to INSTAT data, the biggest increases were seen in oils and fats with 30.3%, breads and cereals with 19.1%, dairy and eggs with 18.5% and vegetables with 9%.

The average Albanian family with 3.6 people brings in around 84,000 lek ( EUR 718.14) of which 36,000 (EUR 307) is spent on food. With an increase of over 12%, that brings the amount to just over 51,000 lek (EUR 436). When taking into account the 769,000 families in Albania, and the increase in prices, this equates to EUR 30 million more being spent from family budgets just to meet sustenance needs.

At the same time, wages have not increased at a similar rate. The average gross salary for an employee during the first quarter of 2022 was 59, 242 lek (EUR 500), an increase of 5.8% on the previous year, around half the rate of inflation. It’s also worth noting that the average salary is skewed by a big discrepancy between those earning a lot and those earning very little, compounded by the informal economy. Furthermore, huge differences are present in salaries in the capital of Tirana and more rural areas.