Prices stabilise in Moldova

Prices stabilise in Moldova
/ bne IntelliNews
By bne IntelliNews September 12, 2023

Consumer prices in Moldova (chart) decreased marginally for the third consecutive month in August, stabilising after the sharp 37% surge accumulated in 2022 and in the first five months of 2023.

Annual inflation dropped below 10% y/y for the first time since November 2021, to 9.7% y/y in August.

The annual inflation rate will further decrease to 9.2% by the end of Q3 this year and move within the target band of 5%+/-1.5pp by the end of the year, according to the National Bank of Moldova (BNM) forecast.

Moldova’s monetary authority took a dovish stance this year as inflation was plummeting, dragged down by demand-side factors. It cut the policy rate twice in May and June by 4 percentage points (pp) each, bringing it to 6%.

“Inflation no longer poses a risk to investment and consumption. Inflationary conditions are favourable for economic growth. The monetary conditions that the central bank has created will contribute to the growth of the economy,” BNM's governor Octavian Armasu said.