National Bank reviews inflation target

Inflation rate this year will be 0.2 percentage point higher and will stand at 4.1%, as revised today by the National Bank of Moldova. The 2013 inflation target has been revised to 5.3%, up 1.4 percentage point on the previous forecast, Info-Prim Neo reports. NBM Governor Dorin Dragutanu said the main factors that made the Bank revise its forecast were the unanticipated international oil price developments and the greater than expected impact of the weather conditions on the domestic food prices. Further, global economy risks have increased considerably lately due to the debt crisis in the Euro zone. Another risk related to the global economy is the reduction in foreign investment and financing, which will also restrain the pace of economic growth. “Domestic inflation pressures could be amplified to a significant extent by the rise in oil prices on international markets”, said Dragutanu. An essential risk, according to Dragutanu, could be the rise in Russian gas import prices. However, it has been estimated that in the next eight quarters inflation will remain within a 1.5 percentage point margin from NBM's 5% target.