The consumer price index will diminish by the end of 2016, according to the National Bank of Moldova’s updated inflation forecast presented on August 11, IPN reports.
“We are in a period of deflation owing to the weak economic demand, even if the National Bureau of Statistics reported an improvement in the economic situation,” said the National Bank governor Sergiu Cioclea.
This year inflation is expected to reach 6.7%, down 0.3 percentage points compared with the level forecast in April. For 2017, the inflation is projected at 4.4%. The annual rate of inflation will return to the variation interval of the central bank’s inflation target (5%, ±1.5 p.p.) in the third quarter of 2016. The highest value, of 6%, will be recorded in the second quarter of 2018, while the lowest one, of 3.5%, in the fourth quarter of 2016.
Speaking about the factors that will influence the evolution of inflation, the governor said the food prices will make a slightly descending contribution until the first quarter of 2017, which will then rise slightly. The highest annual rate of inflation for food products will be recorded in the third quarter of 2016 - 5.9%.
The contribution of oil prices will be negative this year and will then become positive. The contribution of other external factors, related to the development of the economies of the EU member states, Russia and other countries, hasn’t changed significantly compared with the previous forecast.
The annual rate of inflation in July 2016 was 7%. The consumer price index in July was by 0.9% lower than in June following the over 2% reduction in food prices and the 0.2% decline in non-food prices. The tariffs of the services provided for the population rose by 0.3%.
