The National Bank of Moldova projected an inflation rate of 3.7% for 2018 and of 4.7% for 2019, IPN reports.
According to the report on inflation presented by National Bank vice governor Vladimir Munteanu on February 6, the annual rate of inflation in December 2017 was at 7.3%, down 0.2 percentage points (p.p) compared with the Bank’s forecast.
This indicator was influenced the most by food prices (3.9 p.p.), regulated prices (1.5 p.p.), basic inflation (1.6 p.p.) and fuel prices (0.4 p.p.). However, food prices were moderate in the fourth quarter of last year. Neither the regulated prices, nor the fuel prices, which are volatile, are expected to essentially change.
In the first half of this year, inflation will decline, but will rise again in the second half and will come close to 4.7% in 2019, not far from the National Bank’s target inflation of 5%, plus minus 1.5 p.p.
According to the vice governor, the banks possess large volumes of liquidity. “The low base rate of the National Bank and the good management of liquidity could contribute to the country’s economic development through the provision of low-interest loans to business entities,” said Vladimir Munteanu.
He also said that the average interest rate on loans is of 9.8%, at some banks even lower. This stimulated lending. The volume of new loans in lei last year rose by 0.3% after declining for two years.
At the end of 2017, the Executive Committee of the National Bank of Moldova decided to reduce the number of monetary policy meetings from 12 to eight given that the forecast rounds were extended in accordance with the best practices and the analytical process was strengthened.
