Author: Denis Tahiri
With hands shaking from age, she puts the products she just bought into the bag. In total, a package of eggs, a package of flour, a bottle of oil, yogurt and bread. He adjusts the white scarf that covers his gray hair and takes the food. She takes off and complains as soon as he asks her about the prices.
"Madness is, 8 grains of eggs 300 ALL. Yes, the egg goes into everything to cook. All I got was 15000 thousand Lek, 120 thousand Lek is my mother's pension", he says, adding that a difficult winter awaits him. "My mother is my second wife, I also have the old man, he has a pension of 200 lek. Now you tell me with 320 thousand lek two old men in Tirana, can they both get by with a handful of medicines? a nod was enough and she continues to speak again. "I thank God for giving me three sons, they never let us be bad, I'm far from them and I rarely see them, but they don't let us miss anything". Asija confesses to "Signalizo".
The pensioner represents the portrait of the third age struggling with salty prices and low pensions. Young people do not make a difference, however. The couple Elsa and Arbeni (names changed due to the job position they hold), a young couple, both in their 30s, are employed in the state administration.
The payment that gives them a headache is the rent for which they pay 50 lek every month. Then there are also the electricity and telephone bills, which are a salary. The other is used for food.
"Everything has become more expensive, going to the supermarket, 300 lek is not enough to buy the necessary things for good nutrition so that you don't have problems later on." Elsa says.
And when you ask them about the salary increase that the government made a few days ago, their ironic smile is not missing. "It was not a salary increase, it was only the indexation of the salary due to inflation, which had not been done for years and the state is obliged to do it every year. explains the head of the family.
The rise of junk food hits families
In the first months of 2022, price increases were felt by the majority of Albanian consumers. The first days of March 2022 found flour in Albania with an increase of 36%. According to Open Data Albania , the groups of goods and Services that have experienced the most growth during this year are Services to personal means of transport 26.7%, oils and fats 22.4%, bread and cereals 15.8%, vegetables including potatoes 10.5%, milk, cheese and eggs 10.3% and sugar, jam, honey, chocolate, and sweets 10.2%. Meanwhile, the price that jumped during the day was that for buying an egg, which until January 2022 cost 17 ALL. Currently, it is 30 Lek per grain.
In Albania, they forgot to review salaries
The increase in the price of gasoline, as well as oil and gas, increased the economic burden of a citizen even more. Various measures were taken by the governments of neighboring countries, where the one that stood out was North Macedonia, which immediately approved the law on reducing the excise duty on fuels that the state received from their sale, as well as the law on reducing the Value Added Tax for fuels from 18% to 10%, while removing VAT on all basic foods. The removal of this VAT is almost a unique case in the region. A similar thing was requested in Albania a few weeks ago, where opposition MPs, due to the price increase, requested the reduction of VAT from 20% to 6%, but such a thing has not found the support of the government.
On the other hand, Hasan Stafa, from the consumer office, says that the most complaints are mainly about basic products. "In September alone, over 2134 complaints were registered for speculative price increases". says Mr. Stafa, who adds that the increase in prices is continuous. "The second price increase began on June 14 after the tourist season began, basket foods rose without declaring 17-45% over the last increase in February. he says, adding that the increase continues every week by 10-20 ALL.
And if you ask him where this price increase came from, Mr. Stafa will tell you that the increase started for every food product on February 27, dictated by the price change in the European market and beyond. "The official cause remains the invasion of Ukraine, this aggression raised within 7 days the price of fuel by 46%, flour by 37%, oil by 45-80%, bread by 32%, basket foods by 22-43%, animal products by 30- 54% and transport in general with 30%", he says. Regarding the measures of the social package undertaken, Mr. Stafa states that the compensation covers about 3-4% of the speculative increase in prices. "The Transparency Board is formal, non-active, no one knows who it consists of and is chaired by, and it has no influence on the market". he concludes.
Expert: Late and little measures
Genti Beqiri, economist and currently Director of the Japanese Chamber of Commerce, in an interview for "Sinjalizo" says that the measures taken by the government were delayed and normally the percentage of impact is not 1 to 1, at the level that it is with the increase in prices or living costs.
And while in EU countries, inflation indexation occurs every year at the end of the salary, in Albania this rarely happens. And even when it happens, it is sold as a salary increase, not inflation indexation.
"As long as the system does not work to make an indexation at the end of the year, i.e. how much inflation has increased, to increase salaries and pensions, we must be clear that this did not happen with the same percentage that prices increased or individual's living costs, the level of pensions, social assistance, etc. has also increased., says Mr. Beqiri, adding that Albania is behind the entire Balkans. "Kosovo has them at a higher level for 1000 reasons, it doesn't matter what we say", he says, adding that the income in the state budget has increased due to the additional income from VAT, which is higher, due to the price increase, but the redistribution of this additional income to the population leaves out a part of it . Those who do not work in the administration.
"So an individual who works in the private sector is a contributor to the increase in state income, since this increase has come as a result of spending by the population, that is, all consumers, but when you do not work in the administration, you are not affected by mitigation measures, since you are not in the state budget", says Mr. Beqiri, adding that it is important for the state to help pensioners, people with social assistance. "And with this group, I am mainly talking about the middle classes who suffer and have suffered all these years from strange fiscal policies that change every year, that sometimes act as if they stimulate and sometimes as if they help, but which unfortunately never happens and they continue to suffer . This is the reason why the level of migration and the level of desire to emigrate, especially of this group of middle-class professionals, remains so high", concludes Beqiri.
And while the Albanian government has been categorically against the removal or reduction of VAT, just as North Macedonia has done for the food basket or fuel, the solution in Albania, according to the economy expert, could be found very simply, but not by zeroing out VAT. "We do not have a tax administration or a transparent structure in order to make this type of application possible. How many times have we done this, cheaters and the high level of informality has benefited, which means that when this is applied, those who should not have benefited, this is also due to the fact that our tax and fiscal administration is so weak that which adds and creates these pits itself". says Mr. Beqiri, adding that there are other ways that could ease the increase in prices, and one of them is to help the producer by reducing the VAT.
"All those who produce the local products of the food basket can very well be helped by accrediting them, those who have paid the state recognize the invoices, as now the invoices are online and it says "During this year, this company that produces food products has paid VAT x million, we accredit them and normally there is Tax-Profit and tax x million to pay and a correction is made at the end of the year, this is the best stimulus. This means that instead of paying 10 million ALL new taxes at the end of the year, I pay half of them and get to know him.says the economic expert, adding that this method also helps the business to be formalized, that is, it is more interested in being as regular and transparent as possible because at the end of the year they will be recognized. "Albania does not recognize these applications, or they do not know how to implement them or they do not want to implement them",he concludes.
Although the increase in prices has also been felt in Europe, in Albania it turns out that 40 percent of income continues to be spent on food. But while the same thing does not stop for fuel, and for other products at the beginning of autumn, INSTAT announced that the construction index also showed an increase.
