In the medium term, the annual inflation rate will fluctuate in the vicinity of the 5% target and will remain within the range of +/-1.5 percentage points during the forecast period. The annual inflation rate will accelerate until the beginning of next year, then it will gradually decrease until the end of the forecast horizon (third quarter 2026), except for the fourth quarter of 2025 when it will increase significantly. The data were presented on Tuesday by the governor of the National Bank of Moldova Anca Dragu at a news conference, IPN reports.
The governor noted that during April-May 2024, the annual inflation rate continued the downward trend, temporarily leaving the range of +-1.5 percentage points. The annual inflation rate declined from 3.9% in March to 3.3% in May and returned to the target range in June.
“The leaving of the target variation range is mainly caused by the delay of some budgetary costs and also by the postponement of the adjustment of some regulated charges. The downward path of inflation in the second quarter of this year was supported by subdued domestic demand that exerted disinflationary pressure on prices. Disinflationary pressures also continued to be driven by the trajectory of food prices on the international market, domestic prices for agricultural and industrial production, as well as lower charges. On the other hand, certain inflationary pressures were determined by adverse sectoral developments,” the NBM governor explained.
According to her, aggregate demand continues to generate a disinflationary impact on the annual inflation rate, which will be mitigated by some charge adjustments, such as the increase in charges for medical services, which came into force in July this year. At the same time, the average annual inflation rate was 3.5% in the second quarter of 2024, 0.8 percentage points lower than in the previous quarter.
“The NBS has published the inflation data for July. Thus, inflation is 4.8%. At the moment we are analyzing the published figures to make the necessary conclusions. However, at first glance it can be said that annual inflation has increased as a result of the rise in regulated prices and food products,” said the governor.
Anca Dragu also said that the annual inflation rate will reach a maximum of 6.4% in the first quarter of 2025 and a maximum of 4% in the second quarter of 2026. The average annual inflation will be 4.7% in 2024 and 5.3% in 2025. The annual pace of inflation is determined by the positive contribution from core inflation, food prices, regulated prices and less from fuel prices.
