Albania posts annual inflation of 2% in March

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Core consumer prices, which strip out volatile items like fresh food and energy, rose by 2 per cent Y/Y versus 2.5 per cent in February.

The report suggests inflation, after being dormant much of past year, is again rising slowly but steadily toward the Federal Reserve's goal.

Yet the rate of inflation over the past 12 months rose to 2.4% from 2.2% and hit a one-year high.

The government's gauge of consumer prices fell in March, pulled lower by an unexpected decline in gasoline prices.

The prices of food and non-alcoholic beverages, which have the largest weight of 39% in the consumer basket, grew 2.3% on the year in March, from a 2.2% increase in February, the statistical office said in a statement. As such, many economists believe the Federal Reserve will raise interest rates three more times this year.

Last year's weak cellphone services prices are also expected to fall out of the calculation for March PCE price index data, which is scheduled for release on April 30.

Last month's CPI decline was entirely due to a 5% drop in gasoline prices.

If inflation climbs any faster, the central bank is likely to raise USA interest rates more aggressively. Profits at industrial firms picked up pace in the first two months of the year from December but still lagged growth for the whole of 2017.

"Fed hawks [will] point out to their colleagues that the core CPI rose at a 3% annualized rate in the first quarter, the fastest increase in 12 years", he told MarketWatch.

The advance in the core CPI brought the three-month annualized gain to 2.9 percent, after 3.1 percent in February. That was the biggest annual increase since February 2017. That measure-the price index for personal consumption expenditures-shows inflation continues to run below the Fed's target but is not far off. Food prices edged up 0.1 percent after being unchanged in February. Prices consumers paid for clothing went down 0.6 percent. Healthcare costs rose 2.0 percent year-on-year, below the 2.9 percent average annual rate over the past 10 years.

Economists surveyed by The Wall Street Journal expected no change in overall prices over the month and a 0.2% rise in core prices.

There were also declines in the cost of telecommunication, used cares and trucks, tobacco and education.

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