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The strong rise in prices is significantly burdening citizens, especially those with low incomes.
This has caused inflation to exceed the Bank of Albania’s target of 3% for the second consecutive month, culminating in December with 3.7% mainly due to the increase in the price of basket products and fuel.
This high inflation rate, according to economics expert Enton Duro, may add to the pressure for wage increases, which obviously do not go in the same trend as rising prices.
“No matter how controlled inflation is, there are still costs, for that band that lives on fixed incomes and the accelerated rise in prices affects the way they reallocate spending. The consumer basket is affected. as we have a fiscal package that easily enters into force in the middle of the year, but this may also come as a result of the situation, pending its stabilization “, said Enton Duro, economics expert.
In such conditions, the government and the central bank estimate the expert Enton Duro should add attention to keeping inflation under control.
“A 3.7% inflation is still not very strong, although it has put monetary policy instruments in a risk band, but I believe that the BoA should not take current initiatives to respond yet. The problem is for the next steps if they are well foreseen. “One of the negative effects that the intervention of monetary policy in controlling inflation can bring is the credit markets, where very quickly they can bring effects on the growth of problem loans”, said Duro.
According to the Bank of Albania projections, the price crisis is expected to last throughout the first half of the year, only to return to normal, as a result of external factors, the opening of the economy after the pandemic and the increase of commodity prices in the markets. global.
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