Moldova’s inflation hits 18.5% y/y in February

Moldova’s inflation hits 18.5% y/y in February
By bne IntelliNews March 15, 2022

The consumer price index in Moldova increased by 18.5% y/y as of February, accelerating further after it entered double digits last November. In February, the consumer price index increased by 2.1%.

The food prices surged by 23.3% y/y driven by the prices of vegetables (+67% y/y), meat (+27-29% y/y) and edible oil (+25% y/y). Another important inflationary driver was the natural gas price, which soared by 2.3 times as of February despite being partly subsidised by the government.

The country’s central bank expects inflation to rise marginally above 20% y/y this year.

Faced with an inflation rate expected to exceed 20% y/y during the entire second half of the year and a core inflation rate above 15% y/y, the National Bank of Moldova (BNM) increased the monetary policy rate by 2pp to 10.5% on February 15. This was the latest of a series of rate hikes initiated in mid-2021.

Further rate hikes are likely.