Moldovan bank governor unveils inflation report

Chisinau, 11 August /MOLDPRES/- Evolution of inflation rate over the past months confirms the forecasts by the National Bank of Moldova (BNM), lowering inflation trends are pronounced, BNM Governor Sergiu Cioclea said today in an inflation report.

The annual rate of inflation decreased from 9.4 per cent in March 2016 to 7.4 per cent in June. “The average value of inflation in the second quarter was down by 0.2 percentage points against 8.1 per cent- anticipated value within the April forecast”, Cioclea said.

The low economic growth, modest domestic demand, decreasing prices for energy resources and food products, stability and even slight appreciation of Moldovan leu, monetary policy easing and BNM interventions on the market are the factors, which led to reducing inflation.

The average annual inflation rate, according to the current forecast, will register a decreasing trend by late 2016, after which stabilization around 5 per cent target will follow. On average, in 2016 the inflation will reach 6.7 per cent and 4.4 per cent in 2017. Under forecast, the inflation will return to within variation of ± 1.5 percentage points from 5.0 per cent- inflation target in the third quarter of 2016. The maximum value will be recorded in the second quarter of 2018 amounting to 6.0 per cent, and the minimum value in the fourth quarter of 2016 – 3.5 per cent, the bank governor said.

The BNM revised downward the inflation forecast for 2016 standing at 6.7 per cent against 7.0 per cent as anticipated in May. The central bank expects a 4.4 per cent- increase in consumer price index in 2017 against 4.7 per cent as forecast earlier. It is for the third time, when the National Bank revises downward the inflation forecast for 2016, it fell to 10.1 per cent in February and in May – to 7 per cent.

(Reporter V. Bercu, editor M. Jantovan)