The last available data on inflation in Europe for last December show the total inflation rate in the Republic of Moldova is 13.9%, while the inflation rate of food products is 17.46%, shows the website Trading Economics. It is a substantial rise compared with the figures for December 2020. “We see a higher inflation of food products and this is paradoxical as the Republic of Moldova is an agrarian country,” economic expert Viorel Gîrbu commented for IPN. Food inflation is higher than in the energy sector. This thing should concern the authorities.
This has happened in the Republic of Moldova not today or yesterday, but for a longer period of time. “During at least four years, the inflation has been pushed up by the rise in food prices. That’s why we should see where the dysfunctionality is. The conclusion is that there is no competition. The market is not sufficiently elastic and does not adjust swiftly. This makes the prices rise considerably in particular periods of time,” explained Viorel Gîrbu.
According to the expert, the authorities of the Republic of Moldova should determine what is happening on the food products market, which are the business entities and the problems they face. “The authorities should find a response to the question: why do the prices rise monthly,” stated Viorel Gîrbu.
The introduction of protectionist measures by limiting imports so as to support the national producers is an instrument that cannot be used exclusively. “The authorities should ponder over, assess and see to what extent they can use it. Very precise approaches are needed here. In principle, the use of protectionism is justified, but not exclusively,” said the expert, noting a long-term protection strategy is needed, for a five-year term, for example.
As to the forecasts about the inflation rates for this January and February, Viorel Gîrbu said the situation remains serious. “We had a 50% rise in natural gas prices. This affected the inflation rate of industrial products. The prices of industrial products will go up. The prices of foods products will also continue to rise,” stated the economic expert.
