Expenditures for Albanian households have increased in the first months of 2026, driven mainly by increases in rents, fuel and living costs. According to data from the Bank of Albania, average annual inflation reached 2.5% in the first quarter of the year, up from 2.2% at the end of 2025.
The increase in prices has been felt most strongly in housing and transportation, while conflicts in the Middle East and the rise in oil prices in international markets have increased pressure on the Albanian economy.
Rent, the cost that burdened families the most
The category that had the greatest impact on the increase in the cost of living was housing and rents.
Rental price growth reached 7.5% during the first quarter of 2026, from 7.1% at the end of last year, contributing 1 percentage point to overall inflation.
In January and February, rent increases reached 7.7%, the highest historical level recorded so far. According to the report, food and rent alone accounted for about 70% of all inflation in the country, indicating that basic living costs continue to weigh heavily on Albanian families.
Fuel prices increased by 17%
The next biggest hit came from fuel. In March, fuel prices in Albania rose sharply, registering an inflation rate of 17%, compared to just 0.1% in January and February. The increase is directly related to tensions in the Middle East and the rise in oil prices on global markets.
Fuels contributed 0.5 percentage points to March inflation, directly affecting transportation costs and indirectly affecting the prices of goods and services.
Food continues to remain expensive
Food also remained one of the main factors driving the cost of living increase. Processed foods contributed 0.5 percentage points to inflation; Dairy products, cheese and eggs remained among the items with the highest impact; Meat continued to remain at high price levels; Oils and fats also recorded continuous growth.
Meanwhile, fruit and vegetable prices experienced relative stabilization during March, partially easing inflationary pressure.
Higher wages, but costs continue to rise
According to the Bank of Albania, the Albanian economy continues to have high demand and unemployment at historically low levels, with the unemployment rate at 8.3%. Wages in the private sector increased by 5.1%, but the pace of increase in living costs, especially for housing and basic expenses, continues to put pressure on household budgets.
The Bank of Albania predicts that inflation will continue to gradually increase towards the 3% target during 2026, while warning that geopolitical tensions and oil prices remain the main risk for further increases in the cost of living. /ekofin.al
