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Moldova's c-bank raises 2019 inflation forecast

Moldova's c-bank raises 2019 inflation forecast Inflation

CHISINAU (Moldova), May 16 (SeeNews) - Moldova's central bank BNM said on Thursday it has revised upwards its 2019 inflation projection by 0.2 percentage points (pp) to 5.1%.

In 2020, consumer prices are expected to rise by 6.5%, as much as the central bank projected in February, it said in a press release.

"The inflation forecast is based on the assumption that tariffs will be adjusted in the second half of 2019. Regulated prices growth rates will increase significantly with a return to 0.9-1.3% in the second half of 2020," BNM governor Octavian Armasu said.

According to forecasts, food prices will be on the upside in 2019, reflecting continued adjustments in the international and local markets, but a reversal of this trend is expected in 2020. On the other hand, the fuel price growth rate should slow down in the near future, according to forecasts.

Moldova’s central bank targets 5% plus or minus 1.5 pp inflation. 

Moldova posted an annual consumer price inflation of 3.2% in April, up from 2.8% in the previous month.

On May 7, BNM decided to maintain its key rate at 6.5%, striving to keep inflation close to the target level.

BNM last revised its key monetary policy rate in December, lowering it by 0.5%, to 6.5%.

(1 euro =20.1417 Moldovan lei)