The annual rate of inflation continued its upward trend and reached 34.3% at the end of August, up 0.8 percentage points on July, being slightly lower than the last projected level. If there are no serious shocks, peak inflation will be witnessed at the end of the third quarter or the start of the fourth quarter. Afterward, the inflation will follow a downward trend. In a news conference, the governor of the National Bank of Moldova Octavian Armașu said the acceleration of prices on the domestic market has been due to the rise in food and energy prices at international and regional levels, IPN reports.
“The adjustment of network gas, heat and electricity rates, the increase in fuel prices and the ascendant dynamics of salaries increased the costs for business entities, which gradually impacted the prices. The war in Ukraine created additional pressure on food prices, fuel prices and prices of some of the components of the basic inflation,” stated Octavian Armașu.
He noted that Moldova does not hold the lead by the rate of inflation. There are countries in the region in which this is higher. However, the growth rate in Moldova is high. “There are countries that, even if they do not have natural resources, have alternative sources of energy, such as the Aeolian one. This offsets to a great extent. We are a small country with a small economy. The external shocks are propagated faster than in large economies,” said the governor, noting many of the regulated prices were maintained low artificially and the adjustment pace is great given the external shocks.
“The monetary policies in the most important economies of the world will most probably continue being toughened up. In the euro zone, the prospects of inflation and economic activities worsen further owing to the energy crisis. The hypothesis that the economy of the Russian Federation will be affected by sanctions in the medium and long terms despite the short-term improvement owing to the increase in the energy prices remains valid.”
