Moldova’s inflation hits 9% amid rising gas and food prices
The annual inflation rate for January stood at just over nine percent, four percentage points above the five percent target set by the National Bank of Moldova (NBM).
According to the Central Bank’s latest report, the average annual inflation rate is projected to reach 7.3 percent by 2025.
The Central Bank cited the increase in natural gas prices, along with the impact of last summer’s drought, as key factors driving inflation. Externally, rising prices for food and oil have also contributed to inflationary pressures.
In practical terms, this means the leu has lost nine percent of its value. Statistical data indicates that the cost of services has risen by an average of 18 percent, while food prices have increased by almost seven and a half percent.
The NBM forecasts an average annual inflation rate of over seven percent, with a more optimistic projection of 4.7 percent for the following year. However, these figures may be subject to revision.
Externally, inflation could rise further due to the fragmentation of international trade, the appreciation of the dollar, political tensions in Europe, as well as military conflicts in Ukraine and the Middle East.
Domestically, uncertainties remain regarding potential adjustments to service prices, including possible changes to electricity tariffs at the end of the heating season. One measure highlighted by the NBM is the modification of the cost-compensation mechanism for heating expenses.
The Central Bank is scheduled to release its next inflation report in May.
Translation by Iurie Tataru
