National Bank of Moldova revised downward forecast inflation rate for 2018 to 3.2 percent

Chisinau, 30 July /MOLDPRES/- The National Bank of Moldova (BNM) revised downward the inflation forecast for 2018 to an annual average of 3.2 percent, compared with 3.3 percent as expected in May, and maintained its forecast for next year at 4.9 percent against 4.7 per cent previously. This is the third time this year, when the BNM diminishes the inflation forecasts.

According to the new forecast, the annual inflation rate will decrease from 3.2 percent in June 2018 to 2 percent on average for the fourth quarter of this year. Subsequently, inflation will have an upward trend, returning in the first half of next year and positioning at the upper limit of the variation range of ± 1.5 percentage points from the inflation target of 5 percent until the end of the forecast horizon (2nd quarter 2020).

The BNM believes that early next year the inflation path will reverse and inflation will increase as a result of the low base of this year's inflation, the significant rise in international oil prices over the past 12 months, the stimulus fiscal policy this year and their side effects.

According to the inflation report No2, launched in May, the BNM predicted that the annual inflation rate will drop to 2.2 percent on average for the fourth quarter of 2018, below the lower band of ± 1.5 percentage points from the inflation target of 5 percent. Subsequently, inflation will return to the range of target variation in the first half of next year.

The state budget for 2018 was built on an inflation rate of 4.3 percent. The International Monetary Fund and the Ministry of Economy and Infrastructure forecast an annual inflation rate of 2.5 percent.

(Reporter V. Bercu, editor L. Alcază)