OREANDA-NEWS. August 11, 2010. According to the National Bank of Moldova (NBM), the moderate CPI reduction three months running confirms the complete absorption of primary growth effects of regulated prices and devaluation of national currency in the first half of 2010.

The annual core inflation (over the last 12 months) in July accounted for 5,2% and reduced by 0,1 pp against the previous month. The core inflation is in limits of marked purpose as at the end of the year, remaining on approximately the same level five months running. The index evolution data on CPI and core inflation coincide completely with forecasts of the NBM on inflation, published on August 5, according to which the CPI will make up 8,2% and the core inflation – 6,2% at the end of 2010.

The slowdown of inflationary processes in Moldova in the next quarters will result in development of economic potential and relatively stable internal demand. The NBM notes the main contribution to the forming of inflation over the last 12 months was made by the growth of rates for goods and services with regulated prices.

Though, in July 2010 the regulated prices were relatively stable, exceeding by only 0,1 pp the level registered in June 2010. The prices for food products continue to fall three months running, mainly, due to seasonal reduction in prices for vegetables and fruit, and other goods. In July the prices for food reduced by 19% against the previous month. The fuel rose in price by 1,2% on the average against June because of higher prices for petrol and coal. This was caused by the growth of world prices for oil products.

The NBM emphasizes the inflationary process in the next three quarters will depend on world prices for food (especially for cereals) and oil. The risks of departure from the forecast of annual inflation remain balanced and the NBM will conduct the moderate monetary-credit policy on the basis of moderate corrections. The NBM will continue to follow attentively the development of macroeconomic indices, situation at the monetary and exchange markets, international economic tendencies.