TIRANA, Nov 3 /ATA/ The Bank of Albania Governor Gent Sejko said at a news conference that the upswing in inflation was mainly driven by shocks generated from demand and supply bottlenecks in international markets. The latter are expected to be temporary and their impact on inflation is expected to be transitory. On the other hand, despite edging up, domestic pressures on employment, wages and inflation are still moderate.
Inflation has trended upwards in the third quarter, averaging 2.4%. This performance reflected – at a larger extent – supply-side shocks from the surge in prices of food, energy, oil and transport costs in international markets.
The effect of shocks on inflation is expected to be present in the current quarter and during the first half of next year, while it is expected to dissipate thereafter. This assessment is based on the consensus of international institutions and market expectations. According to this consensus, prices of oil, energy and food items are expected to stabilise and then decline in 2022, hence reducing pressures on production costs and on consumer prices in Albania.
Domestic inflationary pressures have strengthened even if only gradually and in a contained manner. This dynamic reflects the still insufficient expansion of employment, wages and production costs as well as the expectations of businesses and financial markets for a moderate inflation.
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