Given the foreign and domestic economic constraints, the national economy stagnated in the first half of 2022 and entered a decline in the second half. Also, in 2022, after the rampant rise in the prices of energy resources and food products, the cost of services increased considerably, experts of the National Institute for Economic Research said in the new edition of the publication “Tendencies in Moldova’s Economy”, IPN reports.
According to the Institute, the rate of inflation in the first half of 2022 was 24.2%, by 22.3 percentage points higher than in the corresponding period last year. The jump in the rate of inflation is primarily due to the evolution of energy and food prices.
“The prices of food products grew by 28%, the price of nonfood products - by 18.4%, the cost of services – by 27.3%. This is a major rise caused by the higher prices of public utilities, which increased by 76.1%. The price of natural gas grew 3.5 times, of hot water – by 80.9%, of centralized heating – by 92%. The prices of urban and air transport services also rose,” said scientific researcher Olga Timofei.
According to the analysis conducted by the National Institute for Economic Research, significant rises in 2022 were seen in the prices of agricultural products, building products and fuels. The economic forecasts for the end of 2022 are as gloomy.
“In most of the sectors of the economy, the negative tendencies will persist until the end of 2022. The developments after 2019 reveal the reduced resilience of the agricultural and industrial sectors to the witnessed shocks. The industrial production is expected to decrease by 2%, while agricultural production – by 7%,” said scientific researcher Victoria Fală.
Researchers’ conclusions show that the evolution of international prices considerably influences the dynamics of internal prices. The National Bank will continue to apply a restrictive monetary policy so as to reduce inflation risks. Both of the factors in international rankings place the Republic of Moldova in the list of states with a high political, economic and financial risk. This diminishes the investment attractiveness of Moldova.
