Inflation situation in Albania / We continue to pay more for food

Prices remain high, but the pace of growth is slowing. Inflation in May falls slightly, but citizens still do not feel relief in their pockets. Experts explain the reasons and warn of future risks from international developments.

Prices remain high, products are continuing to become more expensive...just not with the previous momentum. This is how the price trend for the past month can be summarized.

Inflation, the indicator of currency depreciation in the face of price increases, fell to 2.2 percent in May, from 2.3 percent in April. Compared to May of last year, it remains unchanged.

"These are the effects of imported inflation, which, given that there is a decline in the levels of the eurozone, but also beyond... in Albania's main partners. The second reason is related to the exchange rate... the depreciation of the euro," says economic expert Adrian Civici.

The emergence of domestic production has also contributed to low inflation, especially in consumer goods. The indicator fell to just 3.2 percent last month from 3.8 percent in April.

So, the prices of fruits, vegetables, dairy, meat and more continued to be 3.2 percent more expensive than in May 2024. The good news is that the pace of price increases slowed.

"Prices went up. Ok, okay. Oil went up, so come on. But oil went down. They're still stuck at that starting point," says a citizen.

So why don't prices go down once they go up?

"Prices tend to adjust much more quickly when costs increase, while when costs fall, the market is slower to reflect. This is also related to business expectations, lack of competition in some segments or even supply chains that react late," emphasizes lecturer Ardian Civici.

But the calm on the price front may not last. Experts warn that the threat of a new wave of inflation remains alive, especially due to geopolitical developments in the Middle East, Ukraine, and global trade tensions.

"Fluctuations in international oil prices, the increase in maritime transport costs due to conflicts, as well as tensions in food markets, are factors that could turn inflation into a new risk. Albania is exposed to these developments due to its dependence on imports," says Adrian Civici, lecturer and economics expert.

Even the Bank of Albania, in its latest statements, underlines that external risks have not passed, so monetary and financial policy remains on alert./A2CNN