TIRANA, August 13 – Albania’s economy continues to grow, while the recent rise in inflation is mainly temporary, according to the Bank of Albania.
The central bank said average inflation reached 3% in the second quarter, up from 2.5% in the first quarter. Higher fuel prices and some domestic services drove the increase. Meanwhile, the stronger ALL has eased some external price pressures.
Domestic inflationary pressures mainly came from transport and tourism services. Rents also made a significant contribution. However, the Bank of Albania said underlying inflation remains in line with its price stability target without the effect of rents.
The central bank expects inflation to gradually decline after recent shocks fade. It forecasts inflation to remain close to the 3% target over the medium term.
Meanwhile, economic activity expanded by 3.7% in the first quarter. Preliminary indicators suggest continued growth in the second quarter. Consumption, investment and service exports supported the expansion, particularly tourism-related revenues.
Unemployment stood at 8.4%. Private non-agricultural wages rose by 11.5%. Higher productivity and narrower business profit margins have helped limit the impact of higher labour costs on prices.
However, the economic outlook remains uncertain. Energy markets, geopolitical tensions and commodity prices remain key risks. The Bank of Albania warned that worsening international tensions could increase inflation and weaken economic activity.
/a.p./
The post Bank of Albania expects inflation to ease as growth continues appeared first on RTSH English.
