IMF urges Moldova’s Government to avoid controlling bread prices

The International Monetary Fund (IMF) urges the Government to try to find more efficient means to mitigate the impact of potential bread price hikes on the poor segment of the society than the practice of controlling bread prices, IMF Resident Representative Mathisen told a news conference Friday. While IMF understands the intention behind the proposal to control bread prices, because the increase in food prices has a substantial impact on the poor, in economic terms, administering prices, such as on bread, is very inefficient. The consequences in many other countries have been that instead of targeting the groups that actually need the assistance, the measure targets everybody. In addition, the companies whose production was subject to price control have been totally decapitalised, the IMF official explained. Also Friday, Prime Minister Vasile Tarlev stated at the meeting of the Commission for Emergencies that the Government will observe the compliance of bakeries with the laws concerning prices on the so-called ‘social bread’. He stated that there are no reasons for increases in bread prices, not until January at least. According to the prime minister, most of the bakeries have stockpiled the necessary supply of products so as not to raise bread prices.