National Bank of Moldova revises upwards forecast of inflation rate for 2019, 2020

Chisinau, 16 May /MOLDPRES/ - The National Bank of Moldova (BNM) has revised upwards the forecast of the inflation rate for 2019 at 5.1 per cent, against 4.9 per cent, as it forecast in last February. BNM Governor Octavian Armasu today made statements to this effect while unveiling the Inflation Report No 2.  

The forecast on the inflation rate for 2020 was increased from 5 to 6.5 per cent. BNM says that the risks and uncertainties associated with the perspective of the inflation come from the tempering of the activity of the world economy and the increase in prices for oil and gas. The stabilization of the oil’s quotations will yet exclude “the major fluctuations of prices for fuels in the country.”   

The domestic risks refer to the adjusting of tariffs in the second half of this year and the pace of increase in the regulated prices “will significantly grow,” yet with a return to the level of 0.9-1.3 per cent in the second half of 2020. The prices for food products will increase and the pace of the rise in prices for fuels will have a descending trajectory on the entire period of forecast.   

The BNM governor noted that, following the last year low inflation, starting from December 2018, the inflation rate inverted its trend and grew to 3.2 per cent in April 2019, “making for the inflation target interval” of five per cent. The increase in the annual inflation rate was triggered by the “evolution of prices for food products, which recorded the level of 4.5 per cent in April 2019.”    

In the Inflation Report, the National Bank of Moldova said that the annual inflation rate would increase till the end of this year, will reach the maximal level in 2020, after which its trajectory will invert and the inflation will decrease by the end of the forecast horizon.

The state budget for 2019 was built on an average annual inflation rate of 4.9 per cent and a four-per cent growth of the Gross Domestic Product in real terms.  

The Economics and Infrastructure Ministry and International Monetary Fund estimate that the annual average size of the consumer price index will be of 4.9 per cent in 2019 and 5 per cent in 2020.   

The annual inflation rate in Moldova in 2018 dropped to 0.9 per cent, much under the level recorded in the year before, when the consumer price index stood at 7.3 per cent. The inflation decreased considerably, as a result of the increase in prices for: food products by 2.2 per cent, non-food products – by 1.7 per cent and a 2.3-per cent cut in the inflation on the services provided to residents, according to data by the National Statistics Bureau.