Core inflation has started to increase in 2026. According to information from the Bank of Albania, annual core inflation for January increased to 3.09%, from 3.03% in December 2025 and 2.36% in January 2025. At these levels, core inflation is confirmed near the highest levels of the last two years.
The increase in core inflation reflects a trend of rising prices of durable goods and especially services produced by the domestic economy.
According to the Bank of Albania's analyses, the increase in rent constitutes the main source of domestic inflationary pressures and the most determining factor that has led to the increase in core inflation.
However, the increase in some of the prices of tourism-related services has been balanced by the decline in the prices of some goods that are part of the core inflation basket.
The sub-basket that measures core inflation is calculated on a group of products and services that constitute 69.6% of the total Consumer Price Index basket.
Core inflation excludes those products that are inherently highly volatile, such as food and energy products. The main purpose of calculating core inflation is to strip the overall price increase of movements of a shorter-term nature. Core inflation is an important indicator for understanding longer-term price trends and is therefore continuously monitored by the Bank of Albania.
In parallel with core inflation, net core inflation also started 2026 on the rise. For January, this indicator increased to 3.59%, from 3.47% in December 2025 and 2.21% a year earlier. Net core inflation further excludes processed food subgroups (including bread and cereals) from inflation and is measured at 44.6% of the CPI.
Meanwhile, inflation excluding all food and energy products in January 2026 was at 3.44%, up from 3.32% in December and 2.09% a year earlier.
Official inflation in Albania, measured for the entire basket of consumer goods, was at 2.3% in January, the same as it closed 2025. The more limited increase in inflation is mainly due to the low level of imported inflation.
The Bank of Albania's latest monetary policy report, dated December 2025, predicted that inflation would return to the 3% target during the second quarter of 2026. Meanwhile, the monetary policy report for the first quarter of 2026 has not yet been approved, due to the blockage of the work of the Supervisory Council, due to the end of the mandate of the majority of its members.
The next meeting is expected to take place in March, following the election this month of four new members by the Albanian Parliament.
The next report is expected to bring updated inflation forecasts, but longer-term inflationary pressures appear to remain high./Monitor.al/
