NBM LOWERS 2018 INFLATION FORECAST AND RAISES 2019 FORECAST

The National Bank of Moldova has lowered the forecast of average annual level of inflation for 2018 to 3.3% from 3.7% and raised the 2019 forecast to 4.9% from 4.7%.

NBM Deputy President Vladimir Munteanu said at the Monday’s presentation of the second inflation overview that the annual inflation level will fall to 2.2% on average for 4Q2018 from 4.7% in March, which is lower than the target corridor of 5% ± 1.5%.

According to him, it is expected that the inflation will return into target corridor in the first half of 2019.

“The inflation risks are due to the growth of international oil and raw material prices, uncertainty about the duration of this growth, changeability of prices on domestic agricultural products due to weather conditions, uncertainty about the 2018 harvest and the correcting of service tariffs in 2019”, Munteanu said.

He did not exclude that the aggregate demand will remain disinflationary, mostly due to monetary conditions, the economic cycle, as well as internal and external factors.

The first inflation overview, presented at the beginning of February, the NBM lowered its forecast of average annual inflation level to 3.7% in 2018 from 4%, while for 2019 – 4.7%.