Inflation in Albania continued to rise in July, reaching 3.4%. The rate increased for the second consecutive month and remained above the Bank of Albania’s 3% target.

Data from INSTAT show that inflation stood at 3.2% in June, while in July last year it was recorded at 2.5%. Compared with the previous month, consumer prices rose by 0.2% through the end of July.

Food, housing costs and transport continue to exert the greatest pressure on prices. However, transport ranked as the category with the highest annual increase this month.

Transport prices rose by 8% compared with July last year, mainly due to higher fuel prices. This group contributed 0.52 percentage points to overall inflation, while prices in the category rose by 4.7% in July alone.

After transport, the “Recreation, Sport and Culture” group recorded the second-highest annual increase, at 6%. Meanwhile, insurance and financial services became 4.5% more expensive.

Housing-related costs also continued to rise. Rents, water, electricity, gas and other fuels increased by 4.1% year on year, contributing 0.83 percentage points to inflation.

Food and non-alcoholic beverages remained the group with the greatest impact on price growth, contributing 1.18 percentage points. Despite this, food prices fell by 0.5% in July.

Compared with a year earlier, food prices were 3.5% higher.

Only two categories recorded annual price declines. Clothing and footwear became 1.8% cheaper, while information and communication products and services recorded a decline of 0.9%.

July’s figures show that inflationary pressures have broadened. In addition to food and housing costs, rising transport costs are having a significant impact on consumer prices and adding to the burden on household budgets.

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This is the highest level recorded since January 2024. The increase was driven mainly by higher food prices, rents and transport costs.

INSTAT data show that in June, annual inflation was influenced most by the “Food and non-alcoholic beverages” group, with +1.02 percentage points, followed by the “Rent, water, electricity, gas and other fuels” group, with +0.96 percentage points.

Prices in the “Transport” group also had an impact, with +0.21 percentage points; “Furniture, household equipment and routine household maintenance” and “Restaurants and accommodation services,” with +0.19 percentage points each; as well as the “Alcoholic beverages and tobacco” group, with +0.18 percentage points. Likewise, “Personal care and miscellaneous goods and services” contributed +0.14 percentage points, “Recreation, sport and culture” +0.12 percentage points, “Insurance and financial services” +0.08 percentage points, “Educational services” +0.07 percentage points, “Health” +0.06 percentage points, “Information and communication” +0.02 percentage points, while “Clothing and footwear” had a negative impact of -0.03 percentage points.

This inflation has already exceeded the Bank of Albania’s 3% target. At its latest meeting, the Supervisory Council decided not to change the key interest rate, the main instrument for curbing inflation, leaving it at 2.5%.

Governor Gent Sejko said at the latest meeting that the baseline scenario foresees that rising oil and energy prices in international markets will lead to a slight and temporary increase in inflation above target during 2026, as well as a small slowdown in the pace of economic growth in the country. According to him, based on these assumptions, the consequences of this shock are expected to remain temporary and not leave long-term effects on the country’s development trajectory.

According to INSTAT, compared with June 2025, the strongest price increase was recorded by the “Recreation, sport and culture” group at 6.1%, followed by “Insurance and financial services” at 5.1%, “Rent, water, electricity, gas and other fuels” at 4.8%, “Alcoholic beverages and tobacco” at 3.5%, “Restaurants and accommodation services” at 3.3%, “Transport” and “Personal care and miscellaneous goods and services” at 3.2% each, as well as “Food and non-alcoholic beverages” at 3.0%, among others. Meanwhile, the “Clothing and footwear” group posted a decrease of 0.9%./ Monitor

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