The National Bank has raised the forecast of the average annual inflation rate for 2021-2022.
According to the next, third this year, the National Bank's Inflation Report, the average annual inflation rate for 2021 will be 3.1% (+0.6 p.p. in comparison with the previous forecast), and for 2022 - 7% (+ 2.6 pp). Presenting the updated forecast of the NBM during a press conference on Friday, the President of the National Bank, Octavian Armasu, noted that high inflationary risks remain throughout the forecast corridor, and next year inflation may go beyond the corridor established by the NBM. The highest inflation growth is expected in the III quarter of 2022 - 7.6%. Deflationary risks can arise only in the event of a new wave of the coronavirus pandemic in the world and the introduction of new global restrictions. “To ensure price stability without hindering economic growth, it is important to coordinate and synchronize fiscal and monetary policies in order to implement a set of optimal policies for the economy,” stressed the President of the National Bank. Armasu drew attention to the fact that the forecast is based on a "neutral tax impulse", and a possible increase in wages and pensions (which are mentioned in the draft program of the new government) could lead to even higher inflation. According to the forecast of the National Bank, the level of core inflation will grow until the middle of the first half of 2022, after which it will begin to gradually decline, but on condition that there are no external and internal shocks, and depending on the measures of monetary policy. A significant increase in regulated tariffs is also projected, but by the end of the forecast period, they are expected to decline rapidly. Food prices will rise until the end of the third quarter of 2022, but in the absence of force majeure, they are expected to decline from the end of 2022. Fuel prices will increase significantly in the next two quarters, and from 2022 the opposite trend is predicted - they will decline until the end of the projected corridor. The updated forecast of the NBM on inflation is based on the hypothesis of a more active recovery of the world economy and the economies of Moldova's partner countries in foreign trade after the pandemic, while a more pronounced increase in world prices for oil products and food is expected. It is expected that in the euro area economic growth in 2021 will amount to 4.6% (+0.4 p.p. to the April forecast of the NBM), and in 2022 - 4.4% (+0.1 p.p.). Russia's GDP this year will grow by 3.3% (improvement of the forecast by 0.4 p.p.), and next year - by 2.6% (+0.1 p.p.) Inflation in the eurozone countries in 2021 -2022 will amount to 1.9% and, accordingly, 1.4% (+0.3 pp and 0.1 pp to the April forecast), and in Russia - 5.9% and 4.2% (+ 0.8 pp and, accordingly, 0.4 pp). The ratio of the euro to the dollar will remain at 1.2 this year, and 1.21 in 2022. The forecast for the ratio of the Russian ruble to the US dollar for 2021 has been adjusted downward to 73.4 (the previous forecast was 74), and in 2022 it will be 71.1 (the previous forecast was 71.2). In 2021, oil prices are expected to grow even more - to $ 67.9 per barrel (+ 11.3% compared to the previous forecast), and in 2022 the cost of a barrel of oil will be $ 67.8 (+15.3% compared to the previous forecast). According to forecasts, world prices for natural gas will grow from $ 144.3 to $ 170.8 per 1,000 cubic meters in 2021 (+ 18.3%), and in 2022 - from $ 169.6 to $ 226.3 per 1,000 cubic meters (33.4%). In 2021, a more significant increase in food prices is also expected - by 24.1% instead of the previously projected 23%, while in 2022 food prices are expected to increase by about 3.5% (the previous forecast provided for an increase of 1%). // 06.08.2021 - InfoMarket
