Over the medium term, the annual inflation rate will fluctuate around the 5% target and remain within a variation range of +/-1.5 percentage points throughout the forecast horizon. The annual inflation rate will accelerate until the beginning of next year, then gradually decrease by the end of the forecast period (Q3 2026), except for a slight increase in Q4 2025. The data were presented on Tuesday by Anca Dragu, Governor of the National Bank of Moldova, at a press conference, according to IPN.
Anca Dragu mentioned that between April and May 2024, the annual inflation rate continued to decline, temporarily leaving the +/-1.5 percentage point range. The annual inflation rate decreased from 3.9% in March to 3.3% in May and returned to the target variation range in June.
“The departure from the target variation range is mainly caused by delays in budget expenditures and the postponement of adjustments to regulated tariffs. Modest domestic demand supported the downward inflation path in the second quarter, covering April through June, exerting disinflationary pressures on prices. Disinflationary pressures continued to stem from international food prices, domestic prices for agricultural and industrial production, and the decrease in certain tariffs. On the other hand, adverse sectoral developments drove some inflationary pressures,” explained Anca Dragu.
According to her, aggregate demand continues to exert disinflationary effects on the annual inflation rate. Some tariff adjustments, such as the increase in medical service tariffs in July this year, will temper this effect. The average annual inflation rate was 3.5% in the second quarter of 2024, 0.8 percentage points lower than in the previous quarter.
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“The National Bureau of Statistics has published the inflation data for July, showing an inflation rate of 4.8%. We are currently analyzing the published figures to draw the necessary conclusions. However, at first glance, it appears that the annual inflation rate increased due to the rise in regulated prices and food products,” noted the head of the National Bank.
Anca Dragu also stated that the annual inflation rate will peak at 6.4% in Q1 2025 and reach a maximum of 4% in Q2 2026. The average annual inflation will be 4.7% in 2024 and 5.3% in 2025. The annual inflation rate is influenced positively by core inflation, food prices, and regulated prices, with less impact from fuel prices.