Inflation will not exceed 11 pct in 2008, experts

The Institute for Development and Social Initiatives IDIS Viitorul forecasts that the rate of inflation will not exceed the level of 11 percent in 2008, Info-Prim Neo reports. An essential factor that has unbalanced the national economy, IDIS experts say, is the detrimental practice of the Government to borrow money from the National Bank of Moldova. The conversion of the government debt into state securities would be a solution to considerably reduce the rate of inflation. At the same time, experts predict higher rates of inflation in the first two months of the next year as a result of the potential heat price hikes in Chisinau municipality. As the national currency grows stronger, the price of gas is expected to remain the same, at least until Q2-08, while a possible price increase will not significantly change the situation, the experts said. The price of electrical power, however, is expected to rise by at least 20 percent, due to Ukraine’s intention to raise the price of its power supplies. IDIS experts are also optimistic about the stability of the national currency, whose exchange rate against USD will not depart much from the level of 12.3 lei; the supply of credit in the national economy is expected to increase, while the average interest rate on loans is expected to drop below the level of 18%.