NBM mid-term macroeconomic forecast improves

Moldova is recovering after the crisis faster than expected due to structural reforms, trade liberalization, an adaptive monetary policy and improvements seen by Moldova's external trade partners, shows the updated mid-term economic forecast published by the National Bank of Moldova (NBM), Info-Prim Neo reports. NBM Governor Dorin Dragutanu said the updated forecast is more optimistic than the previous edition issued in May. The forecast for economic growth in 2010 improved from 3.4% to 5% and in 2011 from 3.3% to 3.4%. Economic growth in 2012 is forecast to reach 3.6%. “However, as I said earlier, economy will not reach in 2012 its potential, meaning that we will have an economic growth without significant inflation-related pressure”, said Dragutanu. Concerning inflation, Dragutanu said that while it rose significantly in the first months of the year, it is expected to gradually decrease to fit the target of 5±1% in 2012. Accordingly, in the updated forecast, the annual rate of inflation was reduced from 8.2% to 7.8% in 2010, from 7.5% to 7,3% in 2011; in 2012 inflation is forecast to stand at 4.6%. The main factors that can cause inflation in 2011, according to the NMB, are related to the rise in global prices on food and energy products. “Considering that the non-monetary inflation factors have weakened and are able to change something only in the short run, the NBM decided not to tighten its monetary policy in 2010. Our monetary policy will remain adaptive, meaning keeping inflation under control without affecting economic recovery and growth”, said Dragutanu.