NBM forecast: In 2021, the average annual inflation rate will be 1.8%, in 2022 - 4.4%.
The Governor of the National Bank of Moldova (NBM), Octavian Armasu, submitted these data while presenting the first inflation review this year on Friday. He noted that the updated forecast corresponds to the previous forecasts and confirms the accuracy of the calculations of the NBM Executive Committee. This sequence, according to Armasu, is reflected in the reaction of the monetary, foreign exchange and credit markets and in the future will affect the level of inflation, which in the near future will return within the limits of the corridor established by the National Bank: 5.0% ± 1.5 percentage points. Octavian Armasu noted that the restrictions associated with the pandemic introduce a number of uncertainties regarding the economic recovery and agricultural production in 2021. “Deflationary risks remain associated with various factors, including tax pressure in case of restricting access to external financing. At the same time, an increase in the economic activity of the population and economic agents is expected, as well as the restoration of agricultural production after an unfavorable agricultural season, an increase in the domestic demand,” said Armasu. At the same time, he stressed that the National Bank will continue to monitor the development of the macroeconomic situation and at the right time, without prejudice to the main objectives of ensuring price stability, will resort to the necessary measures to maintain a sufficient level of banks' liquidity in order to ensure the viability and stability of the banking system. According to experts of the National Bank, the level of core inflation will grow due to an increase in the cost of imports and an increase in excise taxes in 2021-2022: in 2021 the average annual level of core inflation will be 3.4%, in 2022 - 5.4%. Regulated tariffs will decrease in the first half of 2021, and from the third quarter they will begin to increase, which will last until the end of the forecast period. The average annual decline in tariffs in 2021 will amount to 1.4%, and in 2022 they are expected to increase by 0.7%. Food prices will be relatively stable during the first three quarters of 2021, after which they are expected to rise significantly until the end of the first half of 2022, and then the price growth will stabilize. The average annual growth in food prices in Moldova will amount to 2.1% in 2021 and 5.8% in 2022. Fuel prices will rise until the end of the third quarter of 2021, after which they are expected to decline and stabilize. Average annual growth in fuel prices in 2021-2022 will be about 4.5%. The updated forecast of the NBM on inflation is based on the hypothesis of a more moderate than previously predicted growth of the economies of the Eurozone countries and Russia: in 2021 the growth will amount to 4.4% and, accordingly, 3%, and in 2022, the GDP of the eurozone will grow by 4%, in Russia - by 2.4%. Inflation in Eurozone countries in 2021-2022 will be 0.9% and 1.3%, respectively, and in Russia - 4.4% and 3.7%. The ratio of the EUR to the USD in the current and next year is projected at 1.22. The forecast for the ratio of the RUB to the USD for 2021 has been adjusted upward to 72.4 (the previous forecast was 72.1), and in 2022 it will be 70.1. In 2021, oil prices are expected to rise - to $54.4 per barrel (+ 23.3% compared to the previous forecast), in 2022 the cost of a barrel of oil will be $ 51.9. World prices for natural gas will go down from $150.9 per 1,000 cubic meters in 2020 to $140.5 per 1,000 cubic meters, but in 2022 they will grow again - to $154.7 per 1,000 cubic meters. In 2021, a more significant increase in food prices is also expected - by 14.3% instead of the previously projected 3%, while in 2022 food prices are expected to decline by about 1.2%. // 05.02.2021 - InfoMarket.
