The National Bank of Moldova has cut the forecast for the average annual inflation rate for 2020 by 0.9 percentage points - to 4%, and for 2021 - by 1.7 p.p. - to 2.5%.
Such data was announced by the President of the National Bank Octavian Armasu, presenting on Friday the 4-th - last inflation review this year. According to NBM experts, the average annual inflation rate will slightly decrease until the end of 2020, and from the second quarter of 2021, it will begin to grow and reach the target value by the end of 2021. In the next 4 quarters, inflation will remain within the inflation range set by the National Bank: 5,0% ± 1.5 p.p. According to the National Bank's estimates, the level of core inflation will decrease by the end of 2020 amid deflationary pressure from domestic aggregate demand, but by the end of the forecast period it will grow to 6.1% - this will be largely due to the increase in excise taxes in 2021-2022. The average annual level of core inflation in 2020 will be 3.1%, in 2021 - 2.9%. Food prices will decline until mid-2021, but subsequently food prices will rise - to 6.3% by the end of 2022 (affected by the impact of sales of seasonal agricultural products, recovery in aggregate demand and an increase in excise taxes). The average annual growth in food prices in Moldova will amount to 7.9% in 2020 and 4.4% in 2021.The regulated tariffs will be reduced until the first quarter of 2021, after which they are expected to increase, which will last until the end of 2022. The average annual tariff growth in 2020 will amount to 1.6%, while in 2021 a decline of 0.9% is expected. Fuel prices will grow until the beginning of 2022 due to an increase in the cost of oil on the world market and an increase in excise taxes (in 2020 the average annual indicator will be negative - 7.6%, in 2021 an increase of 1% is expected. Updated forecast of the NBM inflation is based on the hypothesis that the economies of the eurozone countries and Russia will decline by 7.5% and, respectively, 4.5% in 2020. At the same time, in 2021, GDP in the eurozone will grow by 5.3%, in Russia - by 3.3%. Inflation in the eurozone countries in 2020-2021 will be 0.3% and 0.9%, respectively, and in Russia - 3.2% and 3.5%. The ratio of the euro to the dollar will be 1.14 in 2020 and 1.19 - in 2021 (previously forecasted the ratio of 1.13 and 1.16) The forecast for the ratio of the Russian ruble to the US dollar for 2020 has been adjusted upward to 72.1 (previous forecast - 69.8 and 68.8 - in 2020 and 2021). In 2020, the oil price will amount to $ 41 per barrel (+ 1.2% compared to the previous forecast), in 2021 - up to $ 44.1 (+ 1.6%) World prices for natural gas will amount to $ 150.9 per 1,000 cubic meters in 2020 and will drop to $ 122.4 per 1,000 cubic meters in 2021. Food prices in the world are expected to grow at a higher pace than previously predicted: in 2020 - by 2.4%, in 2021 - by 3% (the previous forecast provided for lower growth food prices - by 0.7% and 0.5% in 2020-2021). // 13.11.2020 — InfoMarket.
