OREANDA-NEWS. January 17, 2013. In December, 2012 the Consumer Price Index made up 4.1% within last 12 months, 0.4 p.p. up as compared with the previous month. It fitted within the target inflation rate of 5% ±1.5% the 11th month in a row, NBM informs. According to NBM, the annual rate of inflation in Q4, 2012 turned to be slightly lower than that projected in NBM's Inflation Report for November.

In particular, in Q4, 2012the average annual inflation was 0.2.p.p. lower than the projected one thanks to favourable weather conditions which checked the long-term growth in food prices. In 2012 the National Bank of Moldova created all conditions necessary to withhold inflation within 5% ± 1.5 p.p., fixed in the Strategy of Monetary Policy of NBM of Moldova for 2010-2012. By the end of 2012 the annual inflation rate has not exceeded the mid-term inflation target. The monthly inflation rate was 0.5% in December, being determined by the 1.1% higher food prices, 0.3% higher nonfood prices and 0.1 higher prices for services to the population.

The increase of the inflation in December was determined by a seasonal factor and a growth in prices for vegetables and cloths. The seasonal factor excluded, prices in December grew modestly, by 0.3%. This dynamics was contributed by food prices and the core inflation. The impact of regulated prices was insignificant. Not being pressed by the demand, the core inflation increased slightly just as in previous months.

In December, the contribution of food prices was more significant than in November, but much less than in Q3, 2012. The contribution by regulated prices was explained by an increase in prices for medicines mostly. The annual core inflation made up 3.7% in December, 0.1 p.p. down as compared with the previous month.

In December prices for foodstuff grew 1.1% as compared with November. In particular, prices increased 7.9% for fresh vegetables, 1.3% for fish and canned fish, 3.2% for potatoes, 1% for eggs, 0.9% for mil and dairy and 0.6% for fats. The increase was determined by fallouts of the summer drought of 2012. In December, 2012 prices for fuel of all kinds decreased by 0.3%.

Namely, bottled gas prices fell 0.3% and combustibles went 0.7% down. However, prices for firewood and coal increased 0.8% and 0.1% respectively. In December regulated prices increased 0.1% as compared with November due to the 0.3% growth in medicine prices.

The growth in administrative prices was also contributed, but a less degree, by the 3.7% higher prices for railway international transportation and the 7.15 higher prices for air transportation. The annual rhythm of administrated prices made up 2.6% in December, remaining unchanged as compared with November, 2012.