{"id":26983,"date":"2026-09-16T12:26:23","date_gmt":"2026-09-16T10:26:23","guid":{"rendered":"https:\/\/altax.al\/?p=26983"},"modified":"2026-09-22T12:28:42","modified_gmt":"2026-09-22T10:28:42","slug":"consumption-is-growing-faster-than-production-we-are-entering-a-new-cycle-of-demand-prices-and-imports","status":"publish","type":"post","link":"https:\/\/altax.al\/en\/consumption-is-growing-faster-than-production-we-are-entering-a-new-cycle-of-demand-prices-and-imports\/","title":{"rendered":"Consumption is growing faster than production, we are entering a new cycle of demand, prices and imports"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>The latest data are showing an important change in the way the Albanian economy is moving. Consumption is accelerating, while price pressures from imports and production remain weak.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Albanian economy is entering a phase where demand indicators and cost indicators are no longer sending the same signal.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In the second quarter of 2026, the retail trade sales volume index increased by <strong>6.8% compared with the same quarter of the previous year<\/strong> and by <strong>1.6% compared with the first quarter<\/strong>, after seasonal adjustment. The increase is not limited only to basic products. Sales of non-food products increased by 6.4%, while fuel sales increased by 8.4%.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is an important sign. Retail trade is showing a real increase in sales volume, as the index is calculated by deflating the value of sales using consumer prices. Therefore, after removing the effect of prices, demand passing through the retail trade channel is expanding at a considerable pace.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This increase becomes even more interesting when placed against the latest data on import and production prices.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In ALTAX\u2019s latest analysis, the import price index in the second quarter of the year was almost unchanged, with an annual decrease of 0.1%, while the producer price index increased by only 0.1%. Compared with the previous quarter, the changes were also minimal.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This means that the Albanian economy is not currently facing a new strong inflationary wave coming from import costs or producer prices. External cost pressures have eased significantly.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But at the same time, consumers are spending more.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is where the new economic story begins.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If imported inputs are not becoming more expensive, if producer prices are moving very little, and meanwhile real retail sales are increasing by nearly 7%, then we need to look more closely at the demand side.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">What is driving this consumption? How much of it is supported by rising incomes? How much comes from tourism, remittances, credit, or wealth created in the economy? How much of this demand can be met by domestic production?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">These questions gain even more weight from developments in the labor market. The average gross wage in the second quarter of the year reached ALL 92,150, with an annual increase of 9.8%. If this is compared with annual inflation of 3.2% in August 2026, it results in considerable room for an increase in real purchasing power.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This does not mean that wage growth is the only cause of increased consumption, but it has created new ground for domestic demand.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is precisely where the Albanian economy is facing an important dilemma.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If incomes are rising and households are consuming more, while domestic supply is not expanding at the same pace, then the difference must be covered somewhere else. Part of it may be absorbed by services, part by domestic production, and another part by imports.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Therefore, in the coming months it will not be enough to look only at the value of imports, but also at <strong>their volume<\/strong> and the structure of the goods entering the economy.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">An increase in imports would not necessarily be bad news.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The problem begins when the growth of domestic demand relies increasingly on foreign supply, while domestic productive capacity remains behind.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In this case, economic growth is creating demand, but not sufficient productive capacity.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is also why services indicators will be particularly important in reading the second quarter. Services include a large part of the economy where prices are determined more by domestic factors, such as: wages, rents, transportation, energy, demand, and productivity. Complete data for second-quarter services are expected to be published on September 16.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This will help understand whether the increase in demand is spreading throughout the economy or is concentrated mainly in retail trade.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Meanwhile, the structure of inflation is also sending an important signal. Inflation of 3.2% in August does not appear to be simply the result of a new external shock. According to ALTAX\u2019s latest analysis, the most important contributions come from food and non-alcoholic beverages, transport, and the group of housing, water, electricity, gas, and fuels.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This shifts the focus toward the domestic mechanisms of price formation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">When import prices stabilize and producer prices move minimally, but the final price to consumers continues to increase, the chain linking the importer to the distributor, wholesaler, retailer, and consumer must be analyzed more closely. The same logic also applies to domestic products.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is one economic reason to seek greater transparency regarding costs, productivity, competition, and margins throughout the chain.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In fact, this may be one of the most important economic policy issues for Albania in the next phase.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Today, the economy may be moving from a cycle in which inflation was determined mainly by external shocks to a cycle in which a larger share of pressures is created by the dynamics of the domestic economy itself.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But for this cycle to be sustainable, the growth of demand must be accompanied by growth in supply.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Otherwise, the economy may enter a mechanism where higher incomes lead to higher consumption, higher consumption leads to more imports, additional demand puts pressure on services and domestic costs, while part of the gain from increased demand leaves the economy through imports.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This would be a growth model different from one that would produce a more productive economy.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In fact, the Albanian economy has still not managed to create the capacity to meet this demand.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">With this current trend in the economy, the increase in consumption will increasingly appear in imports and, over time, in new pressures on domestic prices and costs.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Therefore, <strong>demand is expanding, purchasing power is increasing, import prices have stabilized, and producer prices are moving only slightly.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The challenge for the Albanian economy is to ensure that this new demand does not remain simply a demand for more goods and services, but becomes demand for <strong>more production, more productivity, and more value created domestically<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Otherwise, we will continue to experience an economy where consumption grows rapidly, but an increasingly large share of the growth is realized outside it.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The success of economic policies will be seen only from the fact of how much <strong>of what we consume we are able to produce ourselves<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The latest data are showing an important change in the way the Albanian economy is moving. Consumption is accelerating, while price pressures from imports and production remain weak. The Albanian [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":26984,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[10475],"tags":[9763,8188,20942,9968,13961,20943,9056,16289],"class_list":["post-26983","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-en","tag-albania-en-2","tag-consumption","tag-domestic-demand","tag-economic-growth-en-2","tag-import-prices","tag-producer-prices","tag-productivity","tag-purchasing-power"],"featured_image_src":{"landsacpe":["https:\/\/altax.al\/wp-content\/uploads\/2026\/09\/consumption-is-growing-faster-than-production-we-are--640x445.jpg",640,445,true],"list":["https:\/\/altax.al\/wp-content\/uploads\/2026\/09\/consumption-is-growing-faster-than-production-we-are--463x348.jpg",463,348,true],"medium":["https:\/\/altax.al\/wp-content\/uploads\/2026\/09\/consumption-is-growing-faster-than-production-we-are--300x300.jpg",300,300,true],"full":["https:\/\/altax.al\/wp-content\/uploads\/2026\/09\/consumption-is-growing-faster-than-production-we-are-.jpg",640,640,false]},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Consumption is growing faster than production, we are entering a new cycle of demand, prices and imports - ALTAX<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/altax.al\/en\/consumption-is-growing-faster-than-production-we-are-entering-a-new-cycle-of-demand-prices-and-imports\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Consumption is growing faster than production, we are entering a new cycle of demand, prices and imports - ALTAX\" \/>\n<meta property=\"og:description\" content=\"The latest data are showing an important change in the way the Albanian economy is moving. Consumption is accelerating, while price pressures from imports and production remain weak. 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