How much are basket prices at risk from price increases? - Preçi: Albania exposed to new wave of inflation
Recent tensions in the Middle East are increasing pressure on international markets, while discussions remain about a new wave of inflation that is expected to increase in Albania as well.
Economy expert Zef Preçi, in an interview with Scan TV, emphasized that the first blow starts from oil, but the effect spreads rapidly to food product prices, directly affecting the consumer basket.
In an open economy like Albania, any fluctuations in international stock markets are reflected almost immediately in the domestic market. Meanwhile, Albanian families remain among the most exposed in the region due to the high weight that food occupies in the monthly budget.
“It is a well-known fact that our national economy is an open economy. It means that it interacts with surrounding countries, mainly with the countries of the European Union, which are major partners in trade exchanges, investments, etc. That is, starting with energy products. The same can be said about food products. The history of the pandemic and Russian aggression in Ukraine has proven that our economy has been affected by price increases, mainly energy and cereals, and at the same time, the decrease in the socio-economic status of our compatriots working and living in Western countries has had its impact mainly on investments, more than on remittance flows, monetary flows from emigration, because they continue to be at high rates.”
According to Preçi, the serious problem of our economy is that when prices rise in international markets, they are immediately reflected in the domestic market and have signals that wholesale or retail traders will try to increase them, and at the same time, when the crisis passes, they are not corrected in the opposite direction.
"The same can be said for the food package or basket goods. In this area, Albania is among the countries that have the highest weight of average family expenses according to official data, this figure fluctuates somewhere between 47-48% without talking about social groups such as the elderly, pensioners, who have a much higher weight due to minimum income. So, under these conditions, it is expected to have an impact that would have been better if it had been corrected earlier with policies pro-development, domestic production and more facilities that could be made for certain sectors of the concrete economy."
Preçi, among other things, emphasizes that the lack of sustainable support for domestic production, from livestock to strategic crops such as wheat, makes the Albanian economy more vulnerable to external shocks.
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