Bank of Albania warns Trump and Putin could raise food prices

The wave of price crisis in Albania may return!

Donald Trump with the "trade war" and Vladimir Putin with the "invasion of Ukraine" would be the reasons.

"The balance of risks surrounding these forecasts appears – for the moment – ​​neutral. However, high geopolitical tension and the possible increase in trade barriers and tariffs could bring a supply shock with potential negative consequences on economic growth and inflation," Sejko said.

But even if the conflicts do not escalate, in the coming months prices in Albania will increase at a faster pace than at the beginning of the year.

"This forecast factors in our expectations for a more balanced performance of aggregate demand and supply for goods and services, a higher exchange rate stability, as well as for a further decline in inflation in our trading partners. In parallel, the Albanian economy is expected to grow at a stable pace and close to potential in the medium term," adds Sejko.

Despite the "rhetoric of conflicts and rising inflation," the Bank of Albania estimates that the conditions are not ripe for further easing of monetary policy. The base interest rate for the lek will remain at 2.75 percent, at least for another month.

"The Supervisory Council notes that the overall balance of medium-term pressures is gradually approaching our inflation objective. In this context, future monetary policy decisions will continue to be conditioned by new information, and in particular by analyses and assessments of the performance of domestic inflationary pressures," he said, A2CNN reports.

The Bank of Albania predicts that this year the country's economy will experience a positive growth environment, with low inflation and a healthy banking sector.