The economic growth in Moldova last year was robust, but the internal consumption prices increased on a temporary basis. The Gross Domestic Product grew by 4.5% supported by the rise in domestic consumption and the agricultural production. The economic growth in the main destination countries of Moldovan migrants accelerated the volume of remittances that, for their part, contributed to a higher purchasing power of local consumers, National Bank governor Sergiu Cioclea stated in the meeting of the Parliament’s commission on economy, budget and finance that examined the 2017 annual report of the NBM, IPN reports.
The report says the average annual variation rate of the consumer price index was 6.6%. This is by 0.2 percentage points higher than in 2016. The annual inflation rate of consumer prices rose from 3% in January to 7.3% in December 2017 under the influence of the prices of energy and food products and the rise in the tariffs of regulated services. Nevertheless, the annual basic inflation rate continued to evolve in the limits of the inflation target and was 4.8% on average.
The average interest rate on state securities was 6.7% in 2017, as opposed to 15.8% in 2016. The surplus of liquidity in the banking system was mainly conditioned by the higher remittances intended for private individuals that entered Moldova – the equivalent of US$1.2 billion, up 11.2% on a year before. As a result, the Moldovan leu in 2017 appreciated by 14.4% on the U.S dollar and by 2.3% on the euro.
The National Bank last year took measures to consolidate the banking system, stepping up thematic controls over transparency and quality of shareholders. The transactions with affiliated parties and the quality of assets were checked and assessed. Complex field inspections were carried out at seven of the 11 licensed banks.
The balance of bank loans expressed in lei continued to decline, but at a slower pace, totaling 33.5 billion lei in December 2017, by 3.7% less compared with the corresponding period of 2016. The banks continued to attract deposits and the balance of these came to 59.9 billion lei at the end of 2017, up 9% compared with the corresponding period of 2016.
