The annual HICP inflation rate in Kosovo doubled to 4.7% y/y in August in only two months from 2.4% y/y in June after prices have increased by 1.2% m/m in August and 0.8% m/m in July.
The rather high inflation over the past 12 months has reversed the effects of several months of deflation (decreasing consumer prices) in the first part of 2020 that resulted in a negative 0.5% y/y inflation rate as of August 2020.
In August 2021 alone, prices increased rather uniformly across categories, though with a certain concentration in the food sector.
Thus, the prices of food goods (including non-alcoholic beverages) contributed 0.72pp to the 1.2pp inflation (meaning 60%) while this category of goods accounts for just under 40% of the consumer basket.
On an annual basis, however, the main contributor to the headline inflation in Kosovo (as elsewhere) was the price of energy. Thus, the category of “fuels and lubricants for personal transport equipment” contributed 1.55pp to the overall 4.7% y/y inflation, due to the 26.2% y/y higher prices. The energy used in households (electricity, natural gas, and others) contributed another 0.22pp as its price rose by 4.3% y/y. Food prices (+3.6% y/y) contributed 1.44pp, half of which was contributed by the higher prices of vegetables. Finally, higher telecom prices (+20.3% y/y) contributed a substantial 0.55pp to the overall annual 4.7% HICP inflation.