TIRANA, June 18 /ATA/ Core inflation continues to decline and is now at an all time low in three years.
According to information from the Bank of Albania, in May the core inflation rate decreased to 2.33%, from 3.2% at the end of last year and 5.41% at the same period a year ago. The increase in core inflation is at an all time low since October 2021.
Core inflation is calculated by the Bank of Albania for a group of goods that account for 69% of the share in the general basket of the Consumer Price Index. Core inflation excludes those products that usually have high volatility, mainly food and energy products. The purpose of calculating core inflation is to strip the overall increase in prices from fluctuations of a shorter-term nature
Now, core inflation is very close to the inflation level of the full basket of consumer prices, which according to INSTAT for the month of May was 2.2%.
The decline in core inflation is a significant indicator of the expected course of monetary policy. If this trend continues, the Bank of Albania may soon consider returning to the easing direction of monetary policy and lowering interest rates. Currently, Albania has an interest rate of 3.25%, still among the lowest in Europe.
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