The National Bank of Moldova (NBM) projected an average rate of inflation of 4.7% for 2014, 0.5 percentage points down compared with the April projection. For 2015, the inflation is forecast at 3.5%, a decrease of 0.8 percentage points, IPN reports.

NBM governor Dorin Dragutanu said the new forecasts put the inflation rate for the next eight quarters at an interval of plus-minus 1.5 percentage points from the bank’s inflation target of 5%. Though, it’s not excluded that the inflation may temporarily go under the set limit. In the third quarter of this year, the inflation will diminish slightly, while starting with the fourth quarter the rise in the general level of prices will slowdown significantly, especially owing to the sudden diminution of food prices’ contribution.

“Though the internal and external demands are weak, the National Bank managed to temper the disinflation pressure that persists usually in summer by implementing simulative monetary policies in relation to the rate of inflation and the exchange rate,” stated the governor.

The major disinflation risks continue to be related to the significant tempering of the economic activity of the main commercial partners of Moldova, especially Russia and Ukraine, the decline in food and fuel prices on the international market, the possible toughening up of conditions of migration to Russia and the imposition of new restrictions on Moldova by Russia.

Dorin Dragutanu also said that since the inflation target regime started to be implemented, the growth rates of consumer prices have been much lower and weaker. Thus, in 2000-2009, according to the National Bureau of Statistics, the annual average inflation was 16.2%. In 2010-2013, this indicator was 7.1%, while since February 2012 has been permanently in the variation interval of plus-minus 1.5 percentage points from the target of 5%. The average inflation in 2013 was 4.6%.