The effects of the Middle East conflict have been reflected in the Albanian economy at moderate rates. According to INSTAT data, during March, the country recorded a price increase that pushed inflation to 2.6% from 2.1% a year earlier.
According to INSTAT, this is the highest level of inflation recorded in two years, since February 2022, but it remains below the target of the Bank of Albania. The Central Bank predicts that the price index will return to the 3% target within this year.
According to INSTAT, the price increase was mainly influenced by the "Transport" group at 7.1%, followed by "Food and non-alcoholic beverages" at 0.7%, and "Furniture, household equipment, and home maintenance" at 0.4%.
The rise in transport costs was directly affected by oil prices, which reached very high levels during March as a result of the closure of the Strait of Hormuz. Meanwhile, in our country, one liter of oil is being traded at 224 lek per liter. However, following the ceasefire, a stabilization of prices is expected in Albanian markets, starting with oil and then extending to services or food products.
According to the Bank of Albania, although uncertainty and risk for the Albanian economy remain high, the decision to ease monetary policy will continue to be based on the analysis of the latest economic and financial data.
Meanwhile, inflation is also expected to rise in the Eurozone to around 2.5% in March from 1.9% in February, driven by a significant increase in energy prices.