OREANDA-NEWS. November 12, 2010. According to the National Bank of Moldova, the annual core inflation (over the last 12 months) increased in October 2010 by 0,1 pp – up to 4,9% and is within the object limits set at the end of the year.

The data on the evolution of index of consumer prices and core inflation coincide with the NBM’s latest projections, published in November. In October the annual inflation, measured through the index of consumer prices over the last 12 months, accounted for 8%, corresponding to the NBM’s projection.

The monthly inflation rate increased by 1,5% by means of increase of prices for foodstuffs by 3,1% and for nonfoods – by 0,9%, while the increase of tariffs for services, rendered to population, was small – 0,1%. Unlike previous months from the IIIrd quarter, in October 2010 the evolution of monthly inflation level was caused mainly by the seasonal factor, as well as more marked inflation pressure from the increase of prices for fuel and its components of core inflation.

The core inflation was within the annual object, increasing over the last 12 months by 4,9%. At the same time, the tendency of core inflation growth, started in the IIIrd quarter has strengthened and the core inflation increased by 0,5 pp against the previous month. This was caused by the growth of prices for almost all main components of core inflation, except for medicines and detergents that became slightly cheaper in October.

The evolution of prices for products and services, taken into account in calculation of core inflation, reflects to a greater degree starting of cold season and the secondary effect of price increase for foodstuffs. Index of consumer prices over the last 12 months is by 3,2 pp. more than the core inflation, indicative of heightened influence of nonmonetary factors on the inflationary process.

The prices for foodstuffs in October continued their growth, started in September, increasing against the previous month by 3,1%. This situation is explained by the seasonal factor and by the increase of prices for foodstuffs on the international markets, particularly, in Ukraine because of poor vegetables harvest.

In October 2010 the prices for fuel increased by 2,3% against the previous month because of growth of prices for liquefied gas – by 4,2% and for coal – by 3,1%. Increase of demand for coal resulted from the heightened demand for it caused by the starting of heating season. At the same time, the prices for petrol and diesel fuel unchanged as compared to the previous months.

The National Bank of Moldova will continue to follow attentively the evolution of macroeconomic indexes, situation on the monetary and foreign exchange markets, international economic tendencies. In case of deviation of the medium-term projection from the object in view it will use the instruments of monetary policy promptly and adequately in order to achieve the goals, stipulated by the Strategy of monetary-credit policy for a medium term perspective 2010-2012.