The evolution of the rate of inflation in the fourth quarter of 2014 exceeded the anticipated value, the deviation being mainly determined by the larger than projected increase in food prices and the component prices of the basic inflation following the depreciation of the national currency against the U.S. dollar, IPN reports, quoting the National Bank of Moldova.
The higher probability of a recession in the countries of the euro zone and in Russia, which are the main foreign commercial partners of Moldova, can lead to a decline in the currency incomes of the population and the national exporters in the short term, through the channel of foreign trade and remittances. This can influence the exchange rate of the national currency and, afterward, the evolution of inflation. The escalation of the geopolitical tensions in the region could determine additional inflationist pressure.
Given that the national currency has depreciated to a value under that used in 2012 to set the tariffs of the regulated services, there is a major risk that these tariffs will be reviewed up in 2015. The evolution of energy prices on the international market can contribute to the diminution of the internal fuel prices and the partial attenuation of the pressure on the rise in gas and electricity tariffs.
Last December, the annual rate of inflation was 4.7%, being by 0.1 percentage points lower than last November and by 0.5 percentage points lower than in December 2013. The monthly rate of inflation was 0.7%, being fueled mainly by the 1.4% increase in food prices and the 0.5% rise in nonfood prices. The prices of services rose by only 0.1%.
The annual rate of the basic inflation last December was 6.3%, 0.4 percentage points up on the previous month. The rise was determined primarily by the higher prices of clothes, units of transport, footwear, and detergents.
Excluding the seasonal factor, food prices in December 2014 grew by 0.5% on a month before owing principally to the depreciation of the Moldovan leu against the U.S. dollar during the last few months. Fuel prices fell by 0.4% following the reduction in oil prices on the international market.
The central bank said it will monitor and will continue to anticipate the internal developments and the developments in the international economic sector, including the evolution of consumption, the currency market indicators and the modification of the foreign trade conditions so as to ensure the stability of prices in the medium term.
