National Bank of Moldova revises upwards 2015 inflation forecasts to 9.7 per cent

Chisinau, 5 November /MOLDPRES/- The National Bank of Moldova (BNM) has revised upwards inflation forecasts to 9.7 per cent, against its 9.3 per-cent forecast in last August. The annual inflation rate will exceed the BNM's target limit of 5 per cent ± 1.5 percentage-point variation interval. BNM Governor Dorin Dragutanu made statements to this effect at a today news conference on unveiling the inflation report.

According to the report, inflation will return “to the variation interval” in the third quarter of 2017. New forecasts predict a 11.9 per-cent average annual inflation rate for 2016, 0.3 percentage points over the level forecast in August 2015.

Due to the national currency depreciation, hiked up food prices, unfriendly weather conditions of 2015 and additional increases in regulated services tariffs, inflation could temporarily exceed the BNM's target limit of 5 per cent ± 1.5 percentage-point variation interval,” BNM states.

The annual inflation rate stood at 11.1 per cent in the third quarter of 2015, 3.1 percentage points above the level recorded in the previous quarter. Inflation hiked up to 12.6 per cent in September 2015, exceeding for the seventh month in a row the target limit of the variation interval stipulated in the medium term strategy for monetary policy.  

Dragutanu said if two major risk factors came true, inflation rate could rise even more than predicted. The first risk is caused by the further evolution of regulated electricity, gas and heat tariffs, as well as local authority services tariffs. Though it increased “inflation projections” during 2015, BNM did not modify the inflation target, orienting all its policy strategies and decisions towards bringing inflation back to a five-per-cent level.

(Reporter V. Berco, Editor M. Jantovan)