The National Bank of Moldova (BNM) kept the monetary policy rate at 6.5% at the year’s third monetary board meeting on March 20 (chart), despite disappointing economic growth figures published by the statistics office.

Previously, Moldova’s central bank had hiked the monetary policy rate twice since the beginning of the year, raising it from 3.6% to 6.5%, in order to address rising inflation prompted by regulated energy prices. 

Moldova’s economy edged up marginally by 0.1% year on year in 2024, despite the largely supportive monetary policy conveyed by the central bank, which held the base rate at 3.6% throughout most of the year – below the consumer price inflation and well below the CORE inflation. 

The 0.1% economic growth was, however, dragged down by the weak crop in agriculture, which had a negative 1.3 percentage point (pp) impact on the overall figure – meaning that the rest of the economy performed significantly better in 2024 than in 2023.

Inflation will be on a downward trend by the end of this year against the backdrop of below-potential aggregate demand, which will continue to exert a disinflationary impact on prices, and the tempering of pro-inflationary expectations, the BNM said.

Annual inflation was 8.6% y/y in February 2025, 0.5 pp lower than in January, but still above the upper limit of the 5% +/-1.5pp target band.

Moldova’s central bank expects the headline inflation to touch the upper limit of the target band (6.5%) at the end of this year, from a level of 8.5% y/y at the end of Q1.