The annual rate of inflation in the third quarter of this year was by 3.4% lower compared with the second quarter. In September, the inflation was 3%, the governor of the National Bank of Moldova Sergiu Cioclea told a news conference, IPN reports.

The governor said the decline in inflation is due to the modest demand on the domestic market and the temperate reduction in food prices. Also, the prices of regulated services, such as fuel, were by 2% lower than in September 2015.  These factors allowed the average value of inflation to decrease from 7.4% in June to 3% in September.

According to Sergiu Cioclea, the disinflation trend will continue owing to the poor economic activity, under its balance level. Thus, the average inflation this year will be 6.3%, down 0.4 percentage points from the August forecast. For next year, the National Bank forecasts an inflation rate of 4.6%, down 0.2 percentage points from the previous forecast.

The governor said the reduction in the base rate on loans, the last time from 9.5% to 9%, is a precondition for the economic recovery to occur faster. But the monetary policy decisions cannot have an immediate impact on the economy.

As to the large share of bad loans, Sergiu Cioclea said this is also a consequence of the economic stagnation. The central bank will study the European experience and instruments for improving this indicator. On the other hand, if the volume of bank loans is higher (in case of sustained economic activity), the share of bad loans is lower.