The National Bank of Moldova revised up the inflation rate for 2015. Thus, the average rate of inflation will be 5.8%, up 1.2 percentage points from the projections made last October. In 2016 the inflation was projected at 6.1%.
“The new forecast places the inflation in the variation interval of plus-minus 1.5 percentage points from the National Bank’s target of 5% in the next eight quarters, though there is a risk that the inflation will temporarily go above the upper limit,” said the central bank’s governor Dorin Dragutanu.
He noted that the rise in inflation is due to the higher contribution of the basic inflation and the maintenance of food prices. The regulated prices, like the tariffs of energy resources, may rise starting with the second quarter of this year.
The risks to new forecasts derive from the disinflation pressure related to the deprecation of the Russian ruble and the Ukrainian hrivna. The prices of products imported from these countries may decrease and this will have a negative impact on the national producers. A rather real risk is connected with the toughening up of the migration conditions in Russia, the reduction in the volume of remittances and, implicitly, in the demand on the home market. As a result, the people’s purchasing power will continue to decrease.
The foreign demand for Moldovan products will diminish given the recession in Russia. Some of the EU countries also face the risk of recession. The decrease in exports, which is a consequence of the decline in foreign demand, could lead to a lower growth rate of internal prices, with the supply on the domestic market being increased, stated Dorin Dragutanu.
