Annual inflation was 5.2% in September, 1.4 percentage points higher than the level reached in June. In September, the annual inflation rate remained close to the 5% target, although it outlined an upward trajectory after the downward trend started at the end of 2022, IPN reports.
The National Bank of Moldova said that the evolution of the annual inflation rate in the third quarter of 2024 was influenced by adverse sectoral developments, including this summer’s drought, which supported the increase in food prices. However, subdued domestic demand, domestic prices for industrial production, as well as food and oil prices on the international market had a disinflationary impact on the annual inflation rate.
Thus, in the third quarter of 2024, the annual inflation rate was 5% and was lower than projected in the inflation forecast in August, mainly due to the negative deviation witnessed for regulated and fuel prices.
The NBM forecasts that the annual inflation rate will have a relatively stable trend during the entire forecast period and will remain within the range of ±1.5 percentage points from the 5% inflation target. Thus, the average annual inflation for 2024 and 2025 will be 4.6 and 4.9%, respectively, being revised down by -0.1 and -0.4 percentage points, respectively.
“The current inflation forecast has been revised downwards for the fourth quarter of 2024 – the second quarter of 2026. The downward revision of the annual inflation rate forecast is driven by lower than expected actual inflation in the previous quarter, the anticipation of modest domestic demand, of charge reductions in the fourth quarter of 2024, the reconsideration of the impact of drought conditions in the summer of 2024 and a lower forecast of international oil prices. As for the upward revision, it was influenced by a forecast of higher food and natural gas prices on the world market,” reads a press release.
The NBM also specifies that the disinflationary aggregate demand, vulnerability of domestic fruit and vegetable prices to weather conditions in the coming period, uncertainties regarding the volume of agricultural production in 2024 and 2025, the evolution of regulated prices, the tense situation at regional and global levels, volatility of expectations regarding international commodity quotations remain an important source of risks and uncertainties for the forecast inflation in the medium term.
The inflation report for November 2024 was approved on Tuesday, November 5, by the NBM’s Executive Board. The document is to be published on November 12.
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