North Macedonia posted average annual inflation of 19.5% in November, slowing down slightly from the 19.8% inflation a month earlier (chart), according to statistics office data released on December 7. In the first eleven months of 2022, the inflation was 13.8%.

Inflation started to increase rapidly since April 2021. The central bank recently projected average annual inflation of 14.3% for 2022, significantly up from 8.8% inflation projected in the spring.

On a monthly basis, the consumer price index (CPI) slowed down by 0.9 pp from the previous month to 0.5% in November.

As in the previous months, the food and beverages prices posted the largest annual growth of 29.8%, followed by hotel and restaurants (21.3%), housing, water, electricity, gas and other fuels (20%), transport costs (16.5%) and furnishings and household equipment (14.7%).

In the group of food, prices of bread and cereals climbed the most year on year (42.5%), followed by milk, cheese and eggs (39.3%), edible oil and fats (30.8%) and meat (29.1%).

The retail price index grew by 15.2% y/y and moved up by 0.2% on a monthly basis in November.

The central bank expects that next year import prices will decrease, which would also reduce the pressure on domestic inflation. With such expectations the average inflation rate is expected to be more moderate amounting to about 8-9%, depending on the increase in electricity prices on the regulated market.