The National Bank of Moldova revised up the inflation rate for this year and the next year. Thus, this year the average rate of inflation will be 9.7%, up 0.4 percentage points from the last June forecast. An inflation rate of 11.9% was projected for 2016, up 0.3 percentage points from the previous forecast.
According to Governor Dorin Dragutanu, the inflation rate exceeded temporarily the upper limit of the central bank’s target inflation of 5% ±1.5 percentage points due to the depreciation of the national currency during the first ten months of this year and the rise in food prices. The new forecast took into account the planned increases in the electricity and gas tariffs and in the tariffs of other services.
“Despite the higher inflation rate anticipated for this year and the next year, the inflation rate in the medium term wasn’t modified by the central bank and remained at the level of 5%. The National Bank of Moldova will continue to firmly use the available instruments so as to curb inflation and bring it down to the target level. It is estimated that the inflation will return to the set parameters in the third quarter of 2017,” stated Dragutanu.
The governor noted that the updated forecast implies a number of risks that could influence the rate of inflation to go up. These risks include the expected rises in the regulated prices, especially in 2016, and the higher than expected increase in food prices following this year’s drought.
