BNM revises down inflation rate for 2016
17:13 | 09.08.2016 Category: Economic
Chisinau, 9 August /MOLDPRES/ – The National Bank of Moldova (BNM) has revised down the inflation forecast for 2016 to 6.7 percent from 7,0 percent as anticipated in May. The Central Bank expects an increase in the consumer price index in 2017 by 4.4 percent compared to 4.7 percent as previously forecast.
"After a new forecast round, the average annual inflation rate for 2016 – 2017 is placed at the level of 6,7 percent and 4.4 percent, accordingly. It has to return to the range of goal variation in quarter III 2016. BNM decreased the average annual inflation forecast against the previous one, published in May 2016 by 0.3 percentage point for 2016, and by 0.4 percentage points for 2017," states a press release of the National Bank.
It is the third time this year when BNM reduces the annual inflation rate forecast amid easing monetary policy. In May, the National Bank operated the largest decrease of the inflation forecast in recent years, to 7,0 percent against 10,1 percent, as anticipated in February.
"The disinflationary origin external risks associate to reduced economic activity in euro zone countries and the continuing recession in the Russian Federation – the main trading partners of Moldova, with repercussions on reducing the population’s short-term foreign currency revenues and authentic exporters through the population remittances channel and foreign trade. This factor influences, in turn, a further inflation development," notes BNM.
According to an agricultural production increase against the previous year, will influence negatively the growth of food prices over 2–3 consecutive quarters and will cause further decline in consumer inflation.
BNM also states that the reduction of the base rate in recent months, will decrease the interest rates on loans and deposits in national currency and thus, will exert further on inflation developments.
Annual inflation will return within the range of variation of the target of 5 percent in the third quarter 2016, that is one year earlier than previously forecast.
(Reporter V. Bercu, editor M. Jantovan)
