The National Bank of Moldova (NBM) forecasts that inflation will stay at around 5% in the next eight quarters, plus-minus 1.5 percentage points, but risks are also anticipated. "There are external risks related to geopolitics, military conflicts, the war in Ukraine, the conflict in the Middle East, as well as aspects directly related to the economy, to how the economy develops in the major countries, in the states that are for us the main trading partners," the central bank’s governor Anca Dragu stated in the podcast "Give sense to money". IPN reports.
The head of the NBM noted that if the economic growth there is very low, towards zero or even the negative zone, it is clear that Moldova's exports to those countries are affected. The country depends a lot on international gas prices, on agricultural production. "We have seen a negative impact on prices, on inflation. Also, the prices of agri-food products have increased and affected us all. We hope that the year 2025 will no longer bring shocks and questions related to the agricultural production. There are many factors that we monitor. In the next two years, inflation remains where we consider it to be a safe level for Moldova's economy," stated Anca Dragu.
According to the NBM governor, the people need to know about inflation because it affects them every day. If inflation is high, that is, if prices increase rapidly every month by 10-20%, it means that the purchasing power, living standards, the possibility of buying diminish considerably. "We have the same money, but everything we buy costs more. Also, if inflation is too low, then it affects, in particular, the companies as they can no longer sell," explained Anca Dragu.
The governor noted that if inflation is the increase in prices, deflation is the decrease in prices. "The decrease in the rate of price growth is disinflation. Let's say that a product costs 100 lei. If we have inflation of 10%, then it will cost 110 lei. If we have deflation of 10%, it will cost 90 lei. So, the price drops. But if we have an inflation rate of 5%, then it is disinflation. So, the product no longer increases by 10 lei, but by 5 lei. We have a product, this mug, which costs 10 lei. And we know that it will cost 90 lei. We don't buy it anymore. That's deflation. And deflation is a negative phenomenon, despite appearances... But deflation, or price reduction, is an undesirable, negative phenomenon, with negative implications for the economy in general," said the governor of the National Bank Anca Dragu.
