The annual inflation in December 2023 was 4.2%, down 4.4 percentage points from September, which is slightly lower than expected. According to the National Bank of Moldova, the insignificant deviation was mainly caused by the unanticipated decline in electricity charges in November and by the reflection in statistics of the energy compensation granted to the population in the cold period of the year, IPN reports.
“The restrictive monetary policy measures adopted by the NBM at the appropriate time, since the summer of 2021 until the end of 2022, together with the appreciation of the leu and the decrease in regional prices for energy resources and food products, contributed significantly to the lower inflation,” the institution noted.
The annual inflation rate will oscillate insignificantly around the 5% target, remaining within the range of ±1.5 percentage points over the next eight quarters. The aggregate demand will be disinflationary throughout the forecast period due to weak external demand, low consumption financing and restrictive monetary conditions. The rich harvest in 2023 and the positive fiscal impulse, starting with the second quarter of 2025, will mitigate the decline in aggregate demand.
According to the National Bank, the average annual inflation will be around 4.7% this year and, respectively, 4.5% next year.
“The trends anticipated in the previous rounds remain largely valid. The inflation forecast was slightly lowered for the first quarter of 2024 and raised for the rest of the comparable period. The forecasts of core inflation and regulated prices were increased mainly due to the increase in excise duties and, respectively, the reassessment of the impact of the reflecting of the compensation granted to the population for energy resources in the cold period of the year. The forecasts of food and fuel prices have been revised down,” reads a press release of the NBM.
The February 2024 Inflation Report, which contains the analysis of the internal and external economic situation and the medium-term inflation forecast, will be presented by the NBM Governor and published on the official website on February 13.
