Inflation remains highest risk of Moldova’s economy

“Inflation remains the most significant risk for the Moldovan economy on the middle term,” experts of the Expert-Grup Independent Analytical Center maintain. Although the price rise was smaller in March than in the first two months of the year, the cumulative inflation in the first quarter was 4.1%, reads the second edition of the publication “Realitatea economica”, which was presented on April 22 at the sitting of the Economic Press Club, Info-Prim Neo reports. “The authorities’ optimism to curb the annual inflation to a single-digit rate, as was initially stipulated in the Business and Financial Policies Memo for 2008 signed with the IMF, seems to have failed. The International Monetary Fund itself has revised the economic forecasts, pointing to a 11% inflation,” Valeriu Prohnitchi, Expert- Grup’s executive manager says. According to him, the industry registered a 9.6% increase in January-February, and grew by 11% in March. If the wine exports to Russia go on and the opportunities offered by the Autonomous Trade Preferences are fully used, the industry could reach an annual hike of 20%. Also the agriculture, after the 2007 collapse, has all the changes to display a record-high growth, provided the weather conditions are favorable. However, the expected economic growth will not be able to curb on the inflation pressure this year. One of the main causes is the continuous increase of food prices, following the global trend. Especially, they expect that the prices of the produce with high dietetic value will go up. According to the National Statistics Bureau, the people’s expenditures on foodstuffs have grown and represent 35% of the total, compared with 31.72% in 2007. Expert-Grup analysts believe the ratio of the expenses to buy food in the amount of the small-income families is as mach as 50 per cent. The subjective inflation, that is the one felt by poorer categories, is larger than the one actually recorded.