Is inflation restored? Consumer prices rose by 2.2 percent in July compared to a year ago

According to the recent report of the Kosovo Statistics Agency, consumer prices have marked a 2.2 per cent increase in July 2024 compared to the same month last year.

The monthly rate of inflation from June to July 2024 was 0.3 per cent, giving projections for restoring inflationary pressures, though with lower intensity than in previous years when inflation reached two-sided levels.

The past few years were among the worst for Kosovo in decades in terms of the inflation rate. In 2022, Kosovo completed 2022 by 11.6 percent inflation, while next year the overall harmonised index of consumer prices in the country was higher in an average of 4.9 percent compared to 2022.

Although compared with the previous years the AKS reports have shown a reduction in inflation in recent months, in July an increase of 2.2 per cent of inflation has been noted, compared to the same period of the previous year.

The 2.2 percent increase year-on-year in the harmonised Consumer Prices Index (IHÇK) is attributed mainly to the significant increase in prices in various goods and services.

These increases were partly compensated by a significant decline in vegetable prices, which dropped by 5.2%, easeing the overall inflationary impact.

With inflation reaching 14.2 percent in mid-2022, the government did little to curb it, according to a World Bank report. This inflation greatly weakened the purchasing power of less affluent classes in Kosovo.

The exponential growth of inflation was one of the biggest problems faced by the Kurti government, with basic products that “impressed the stratosphere”.

A report on the “Global Rhesis” of 2023 predicted that Kosovo would be hit by poverty, inflation, environmental damage and geoeconomic clashes.

The report stresses that the cost of living dominates global risks in the next two years, while the failure of climate action will dominate the next decade.

The next “Decade will be characterised by the environmental and social crisis, driven by basic geopolitical and economic trends. “The crisis of the cost of living” is listed as the most serious global threat over the next two years, reaching a peak in the short term.” reported in the report.