Impact of key economic indices on inflation, November 2025

In the third quarter of 2025, the Construction Cost Index (IKN) reached 114.0 points, reflecting a year-on-year increase of 1.4%. This slightly lower growth compared to the previous year indicates a slowdown in cost pressures in the construction sector. Wage expenses increased by 6.6%, highlighting strong demand for skilled labor, while machinery and other costs rose by 2.4% each. Meanwhile, construction materials decreased by 0.6%, suggesting a stabilization of global markets and price corrections following previous increases. On a quarterly basis, IKN grew moderately by 0.4%, with wages and transport being the most influential components, while materials remained stable. This dynamic shows that the construction sector is in a stable phase, but labor cost pressures continue to impact the domestic economy and, consequently, housing and service prices for citizens.

The Import Price Index (IÇI), in the same quarter, reached 107.4 points, marking a year-on-year decline of 0.5%. The largest drop occurred in electricity, gas, steam, and air conditioning (-4.6%), reflecting an easing of international energy costs. The manufacturing sector fell slightly by 0.3%, while the extractive industry rose by 0.4%. Stronger declines were seen in food, wood, and textiles, whereas some specialized subsectors, such as metal products and tobacco, showed moderate price increases. On a quarterly basis, IÇI decreased by 0.2%, indicating that import prices remain stable, translating into low pressure on consumer inflation and production costs.

The Producer Price Index (IÇP) reached 129.5 points, recording a mild annual increase of 0.2% and a quarterly decrease of 0.1%. The manufacturing sector was the main contributor (+0.4%), while extractive industry and the water supply and waste management sector each contributed +0.2%. Within manufacturing, furniture and beverage production rose by 1.3%, while clothing and chemical production decreased by 0.5%. For market orientation, domestic IÇP increased by 0.3%, whereas export-oriented prices grew slightly by 0.1%, showing that export prices are sensitive to international energy fluctuations and global supply chains.

These three indices are directly linked to the Consumer Price Index (CPI), which in November 2025 reached 2.1%. Inflation was mainly influenced by the “Rent, water, fuel, and energy” group (+0.81 pp) and food (+0.51 pp). IKN contributes to consumption pressures through labor and construction costs, while IÇI and IÇP provide stability, limiting rapid price increases for citizens.

Throughout 2025, the inflation trend has been moderate and stable (1.9–2.5%), with energy and food prices as the main sources of variation, and minor quarterly fluctuations, reflecting a stable market without strong external pressures.

For 2026, moderate inflation is expected, influenced by energy, rents, and food. In the baseline scenario, average inflation may range between 2.2–2.5%, with IKN maintaining moderate pressure, IÇI stable, and IÇP steady. In an optimistic scenario, inflation could fall to 1.8–2.0%, due to slower wage growth and lower import prices. In a pessimistic scenario, inflation could rise to 2.8–3.4%, if construction and energy costs increase, creating higher pressure on consumers and economic sectors.

The Albanian economy concludes 2025 with moderate price stability, with limited pressures from production and construction sectors, while energy and rents remain critical variables for economic policy and citizens’ purchasing power in 2026.