NBM's inflation forecasts revised up for this year, down for next year

The National Bank of Moldova (BNM) has updated its August macroeconomic forecasts by raising the annual inflation projection from 8.4% to 9.6%, Info-Prim Neo reports. NBM Governor Dorin Dragutanu explained the changes were due to higher food and energy prices than those expected at the beginning of the year. Dragutanu said a number of measures were taken to toughen monetary policy with a view to reducing inflation expectations and mitigating the effects of the second round of price hikes in utility tariffs, fuels and food. For example, the key interest rate was raised from 7 to 10% and reserve requirements from 8 to 14%. However, in 2012 the NBM expects inflation to drop from 7.4 to 6.5%, and further to 4.1% in Q3 2013. “Let me repeat, these are forecasts, not commitments. The inflation target pursued by the NBM remains at 5% ± 1.5 percentage point and we will promptly take any monetary policy decision required to drive inflation into this interval”, said Dragutanu.