OREANDA-NEWS. August 15, 2011. The consumer price index in Moldova in July 2011 for the last 12 months amounted to 8.3 percent, up 0.6 percentage points over the previous month. The basic annual inflation rate was 4%, up 0.6 percentage points from the previous month, according to the National Bank’s press release.

The monthly inflation rate in July this year reduced by 0.1 percent mostly as a result of the decrease in food prices by 0.9 percent, while non-food products became 0.4 percent more expense and fees for services produced to the population – 0.1 percent more expense. The monthly inflation dynamics in July 2011 was mostly determined by the effect of the second wave from the rise in fuel prices and in fees for public utilities, reduction in supply of some goods on the home market and growth of demand for some products and services.

The annual basic inflation rate increased for the last 12 months by 4 percent (0.6 percentage points more than in the previous month). In July 2011, the monthly basic inflation rate was 0.4 percent. The dynamics of the indicator was mostly determined by the growth of prices for building materials, cigarettes, make-up and shoes. Food prices in July reduced by 0.9 percent in comparison with the previous month.

Reduction in the monthly rate of food prices contributed to the growth of the share of vegetables in the basket of goods in conditions when their cost went down considerably. The seasonal reduction in prices was less than in 2010. In July, fuel prices remained practically unchanged in comparison with the previous month as a result of the insignificant reduction in fuel prices by 0.2 percent against the background of the moderate growth of the global oil products prices and the tendency of the MDL strengthening against the US dollar since the beginning of the year. After a significant growth in the first half of the year, the regulated prices in July remained unchanged.

The NBM forecasts for the next period the further growth of fees for natural gas, heating, electric power and hot water as a result of the increase of the purchasing price for imported natural gas. This dynamics will be smoothed though by the favorable agricultural harvest that will contribute to reduction in inflation.

Global oil prices will have a moderate impact owing to the MDL strengthening against the US dollar. The NBM said there are preconditions for the inflation rate to amount to the forecasted level of 8.4 percent by the end-2011. The National Bank of Moldova stresses that it strictly controls the economy dynamics in the country, as well as the international economic situation.