The National Bank raised its forecast of average annual inflation for 2023 by 0.3 p.p. - to 13.6%, and for 2024 - reduced it by 0.3 p.p. - to 4.5%.
Octavian Armasu, Governor of the National Bank of Moldova (NBM) announced such data at a meeting of the Economic Press Club on Tuesday, at which the fourth Inflation Report this year was presented. According to him, at the end of October, inflation entered the set target range of fluctuations and the National Bank will take all necessary measures to keep inflation within the target range of 5% ±1.5 p.p. "We can state that the inflationary wave, through which we were passing, has been exhausted, and now we are at the stage of economic recovery and its development in accordance with the available potential," emphasized the Governor of the National Bank. He noted that the balance of internal risks is generally deflationary in nature and there are no major deviations from previous forecasts. At the same time, the new round of forecasts is complicated by numerous uncertainties and risks associated with the global economy. Geopolitical tensions are rising and there is a possible impact on international energy prices, which will undermine already weak global demand. Although monetary authorities have increased interest rates in recent months, inflation is well above target in most economies. In the euro zone, economic growth is expected to be weak due to the impact of the energy crisis on the industrial sector. The USD is expected to strengthen against other international currencies. The forecast for economic growth in the euro area is maintained (+0.5%), with the forecast for 2024 lowered from 0.9% to 0.6% and for 2025 - raised from 1.6% to 1.8%. Russia's economy is expected to grow faster in 2023 (+1.4%) than previously forecast (+0.4%), with the forecast for 2024 unchanged (+1.3%) and lowered from 1.5% to 1% for 2025. The euro area inflation rate will be 5.6% in 2023 (instead of the previously forecast 5.4%), but will be slightly higher in 2024 than previously forecast at 2.5% (previously 2.4%) and in 2025 – 2.5%. In Russia, inflation will be higher this year (5.6%) than previously expected (5%), but will be 5.2% in 2024 (unchanged) and in 2025 - 4%. The EUR/USD ratio is expected to be 1.08 and 1.09 in 2023-2024 (the previous forecast considered 1.09 and 1.12) and 1.12 in 2025, while the USD/RUR ratio is expected to be 86.3 and 95.6 in 2023-2024 and 95.8 in 2025 (the previous forecast was 81.1, 84.8 and 84.9, respectively). Euribor rates will be higher than previously forecast: 3.4% in 2023 (instead of 3.3%), 3.6% in 2024 (instead of 3.4%), and 3.1% in 2025 (instead of 3%). The price of Brent oil is expected to rise to $83.6 per barrel in 2023 and $82.5 in 2024 (instead of $78.5 and, respectively, $74.7), in 2025 its price is forecasted at $77.2 per barrel. The forecast of world natural gas prices has also been adjusted - by the end of 2023 they will average $681.4 per 1,000 cubic meters (the previous forecast was $636.4 per 1,000 cubic meters), and in 2024 - $561.9 per 1,000 cubic meters (instead of $607.9). In 2025, gas prices are forecasted at $544.3 per 1,000 cubic meters. In 2023, a more pronounced decline in world food prices is expected - by 14% (the previous forecast provided for a decline of 11.8%), in 2024, a slight decline is also expected - by 0.2% (previously forecasted growth - 3.2%). In 2025, food prices are expected to rise by 2%. // 14.11.2023 - InfoMarket.
