Loans are costlier; experts advise waiting
Loans are likely to become more expensive now that the National Bank has increased the base interest rate from 7.50% to 9.0%. This decision is intended to combat inflationary pressures. Ongoing turbulence in energy markets, driven by geopolitical tensions, adds to the uncertainty. As a result, experts are advising Moldovans to consider postponing any plans to take out loans.
Annual inflation reached 6.96% in August, up 0.62 percentage points from July. To curb rising inflation, the National Bank raised the key interest rate. When borrowing costs rise, consumption falls.
"Practical advice for every citizen is to hold off on consumer loans for now—to wait a while. We are talking about buying a car, a washing machine, a new refrigerator, or a phone. We need to postpone these purchases because a rather difficult winter lies ahead. We are facing high inflation," said economic expert Marin Gospodarenco.
In March, the base interest rate was set at 5% and then rose steadily over the following months. As a result, Moldovans began borrowing less; by August, the number of loans taken out had decreased by 2.5% compared to July.
“It’s more challenging for someone repaying a loan—the conditions are not exactly ideal—but when you take out a loan, there are certain factors you need to analyze and consider. For instance, when did you take out your loan? I did so two years ago.”
“Every government in every country knows what it’s doing. I haven’t taken out any loans because I want to sleep soundly and avoid stress.”
“With low wages and high expenses, plus the burden of a loan—well, you know how it is.”
“I believe every family conducts a financial analysis to determine whether taking out a loan is worthwhile, based on their income and how much they can save each month.”
The National Bank warns that geopolitical tensions and instability in energy markets are hindering global economic growth. In the euro area, economic growth remains modest, and inflation is expected to stay above the European Central Bank's target. The NBM Executive Board's next monetary policy meeting is scheduled for November 5.
