According to the Bank of Albania, annual core inflation fell to 2.37%, down from 2.78% the previous month. On an annual basis, core inflation has now declined for two consecutive months, falling below the 3.07% level recorded a year earlier.

For the first time in many years, core inflation has remained below the level of total inflation in the economy - which stood at 2.9% in September - for three consecutive months.

The decline in core inflation over recent months is primarily linked to the base effect within the "rents" sub-category, which had been the main driver of rising core inflation in recent years. In September, inflation for this sub-category fell to 3.3%, down from 6.6% a year earlier. This decrease appears to be related to the completion of a 12-month cycle, given that inflation for this group had accelerated significantly starting from the summer season of 2023, Monitor reported on Friday.

The sub-basket used to measure core inflation is based on a selection of products and services that account for 69.8% of the total Consumer Price Index (CPI) basket. Core inflation excludes products that are inherently highly volatile, such as food and energy items. The primary purpose of calculating core inflation is to strip away short-term fluctuations from overall price increases. It serves as an important indicator for understanding long-term price trends and is, therefore, continuously monitored by the Bank of Albania.

Alongside core inflation, "net" core inflation also experienced a significant decline for the second consecutive month. In September, this indicator fell to 2.23%, down from 2.85% in August. Net core inflation has also returned to an annual decline, compared to the 3.4% level recorded a year earlier. Net core inflation further excludes subgroups of processed foods (including bread and cereals) and is measured based on 49% of the Consumer Price Index (CPI) basket.

Meanwhile, inflation excluding all food and energy products fell to 2.21% in September 2026, down from 2.8% in August, and also representing a decrease from the 3.28% level recorded a year earlier. The decline in core inflation has, for the time being, eased persistent inflationary pressures on the economy. Nevertheless, inflationary risks remain high due to rising fuel prices, a consequence of global geopolitical tensions.

Prolonged high energy prices - a trend observed since March of this year - are likely to feed into production costs, exerting further upward pressure on the prices of goods and services in the coming months.

To date, external inflationary pressures appear to have been partially mitigated by the strengthening of the Lek in the foreign exchange market. However, following this month’s meeting, BoA’s Supervisory Council signaled that an interest rate hike is becoming increasingly likely.