During February, inflation in Albania reached a record rate of 3.9% while the cost of basic food items increased by almost 7%.
The rate of inflation was at its highest in the last ten years and is related to the increased costs of food, energy, and transport. According to data from INSTAT 86% of the aggregate inflation for the month came from those three sectors.
At the same point in 2021, the rate of inflation for food was just 3.2% meaning it more than doubled in just one year. Items that have increased in price the most over the last year include vegetables and potatoes at 16.4%, oils and fats 10.1%, fruit 7%, bread and cereals 6.8%, sugar, jam and cakes by 6.7%, meat by 3.9% and eggs by 3.3%.
The cost of transport also increased by 10.4% when compared to 2021, reflecting the rapid rise in fuel prices.
As for rent, water, fuel, and energy, the rate was 1.9% up from 0 this time last year. While households have been relatively unaffected by increases in energy prices, due to a government pledge not to pass the costs on, energy for businesses has become much more expensive.
This means that while consumers may not be paying more for their household bills, they will be taking the cost by paying more for other services and products as businesses seek to balance their books.
While increases may be lower than some other EU countries, they significantly impact society where a third live on or below the poverty line. The situation is further exacerbated by the depreciation of the lek against the euro following the outbreak of war in Ukraine, waged by Russia.
But the price of bread and other grain and cereal related products could be set to increase even more, as vital supplies from Russia and Ukraine are cut off. The two countries combined account for around half of Albania’s supplies of wheat. The last delivery of Russian wheat arrived in the country last week with industry experts saying while they hope to be able to source the product from other countries, the price will increase significantly.
Prime Minister Edi Rama has addressed growing criticism from citizens by saying that price increases are due to war and market conditions and he cannot do anything about it. He also announced the establishment of a committee to manage the security and economic fall out of Russia’s invasion of Ukraine.
