Prices have risen sharply over the past two months, reflecting the consequences of the Middle East War, which made energy more expensive, with a knock-on effect on other products, as well as the effect that the high influx of tourists is having on the cost of housing for locals.

The country’s statistics office, INSTAT, reported that the inflation rate measured by the Consumer Price Index (CPI) in May 2026 was 3%, up from 2.2% in May 2025.

This is the highest level in 29 months, since January 2024, when the indicator was 3.4%. In April, inflation had also jumped to 2.7%.

The three main factors that have influenced the price increase in May are: The continued increase in rents (with an impact of 0.84 percentage points on inflation, or almost a third of the price increase); Food prices (impact of 0.76 pps), reflecting the increase in the price of raw materials, including energy, as well as the lack of domestic production; Transport (0.51 pps), directly affected by the war, as a result of fuel.

According to INSTAT, the annual price increase in May 2026 was mainly influenced by the “Transport” group by 7.8%, followed by “Insurance and financial services” by 4.9%, “Rent, water, electricity, gas and other fuels” and “Entertainment, sports and culture” by 4.2% each, Alcoholic beverages and tobacco” by 3.4%, “Restaurants and accommodation services” and “Personal care and various goods and services” by 3.0% each, “Furniture, household equipment and home maintenance” by 2.8%, “Food and non-alcoholic beverages” by 2.2%, “Educational services” by 2.1%, “Health” by 1.6%, “Information and communication” by 0.5%. On the other hand, the prices of the “Clothing and footwear” group decreased by 0.5%.

The inflation rate has reached the Bank of Albania's target of 3%. The Governor of the Bank of Albania, Gent Sejko, emphasized in the last meeting with the IMF that the monetary policy pursued by the Bank of Albania remains committed to providing the Albanian economy with appropriate monetary conditions for returning inflation to the target, following an approach conditional on new information and addressing uncertainties about the performance of the economy.

The IMF also noted that inflation has been affected by the increase in energy prices, while inflationary expectations require continuous monitoring. The Bank of Albania has as its main objective the guarantee of stability and does this through the setting of the base rate.