Price hikes, government also to be blamed

In the latest report on monetary policy, Bank of Albania says that part of the inflation was increased due to the taxation policy that our government has implemented in the recent months. According to the Bank of Albania, the 10% taxation on medicines and other fiscal measures have caused further price hikes, which are mostly related to the situation of the international markets.

In fact, the government has undertaken several fiscal measures in the recent months, which have affected prices on the market. Besides including medicines in VAT taxation, the government also decided by the beginning of this year to reduce the VAT threshold from 5 to 2 million ALL of annual turnover, a measure that indirectly aggravates the tax burden that the consumers must pay. The frequent excise increases on some products has also affected price hikes, which has also been confirmed by experts of the Bank of Albania, who underline that the current price level reflects the impact of the excise increase.

Official average inflation during the first trimester was 4%, reaching the maximal legal limit. The Central Bank predicts that the citizens will face high prices for the remaining period of this year. Import prices, an indicator used by the Bank to measure the cost of the products that Albania buys from foreign countries, affected by the continuing Albanian currency devaluation against Euro, warns high inflation also for the months to come.

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