The annual inflation in November fell to the inflation target interval, to 5.5%, being slightly lower than expected. The National Bank of Moldova (NBM) said the deviation was caused primarily by the regulated prices and food prices. The restrictive monetary policy measures taken by the NBM in turn, during a year and a half up to the end of last year, significantly contributed to lowering inflation, IPN reports.
“The latest data confirm the expectations concerning economic activity in the third quarter of 2023. In September, imports and net transfers to resident private individuals decreased by 17% and, respectively, 18.3% annually. Social payments declined by 13.8% annually in October, primarily as a result of the base effect. The pay fund grew in real terms by only 6.2% a year in the third quarter of 2023. As a result, the internal demand remains weak. On the other hand, export, wholesale and retail trade and industry increased,” the central bank noted in a press release.
The interest rates on new loans and deposit in lei decreased in November as well, following the cumulated monetary policy stimulation. The average weighted interest rate on deposits in lei was 4.3%, while on loans was 10.58%, down 9.31 and, respectively, 3.62 percentage points on November 2022. The decline in rates led to a rise in the volume of new loans in lei and to a decrease in deposits. The interest rates on loans and deposit in foreign currencies followed different trends – continued to rise in the case of loans and decreased in the case of deposits.
According to the NBM, the balance of risks of the inflation forecast is balanced, with a slight pro-inflation inclination in the short term. The uncertainties remain pronounced. Among the main sources are the tense situation in the region and in the Middle East, adjustment of the energy charges and reflection in statistics of on-bill compensation for energy costs, the higher foreign costs that will later influence the internal ones, adjustment of the prices of medical services, which have gathered significant pressure during several years. In advanced economies, the interest rates are expected to decrease owing to the weakening of inflation pressure and the aiming of inflation to targeted levels. Reduced volatility in prices of raw material and energy resources is anticipated,” said the central bank.
