OREANDA-NEWS. March 15, 2013. It fitted within the target inflation rate of 5% ±1.5% the 13th month in a row, NBM informs. The balance of inflationary risks during the next period will remain be influenced by external and internal factors with a slight pronunciation of deflationary factors, the press release of the National Bank of Moldova runs.

Deflationary pressures resulted from slowdown in the internal economic activity caused by weak external and internal demand. Inflationary pressures root in adjustments of the fiscal policy for 2013. The increase in food prices caused by the severe drought in the main agricultural regions will create additional inflationary pressures.

The monthly inflation rate made up 0.2% in February, being determined by the lack of aggregate pressure on the side of the demand. In particular, prices for foodstuff went 0.2% up, prices for nonfoods increased 0.4%; tariffs for services grew 0.1%. Besides, the increase in the inflation rate was caused by cumulative revaluation of the nominal effective exchange rate of MDL against foreign currency by 1.4% within the last three months. Not being pressed by the demand, the core inflation increased slightly, as before.

The contribution on the side of food prices and regulated prices was insignificant. In February, the annual core inflation made up 3.9% within the last 12 months, remaining unchanged as compared with the previous month, NBM reports. In February, 2013 the monthly core inflation made up 0.2% , 0.3 p.p. down as compared with the previous month. This dynamics is explained by growth in prices for cigarettes, auto spares, bicycles, building material, detergents and knitted wear. As the month before, the core inflation was slightly influenced by the seasonal factor. In February prices for foods grew 0.2% as compared with January. In particular, prices increased 1.3% for potatoes, fresh vegetable and sugar; 1% for milk and dairy products; 0.6% for fats; 0.5% for alcoholic beverages.

The increase was partially smoothed by decline in the price for eggs y 16.3% and for fresh fruit by 0.9%. The increase in the prices for abovementioned products was determined by fallouts of the summer drought of 2012. The seasonal factor excluded, the food prices did not grow in February. In February, as compared with January, prices for fuel increased 1.4%, being formed by increase in the price for bottled gas by 3.6% and in the price for combustibles by 1.7%. At the same time, prices for firewood and coal did not change.

In February regulated prices increased 0.1% as compared with January due to the 0.3% growth in medicine prices and the 0.7% growth in prices for healthcare services. The decrease in transportation prices adversely, but to a less degree, contributed in the dynamics of administrated prices. Their annual pace of growth was 2.6% in February, which was 0.1 p.p.up as compared with January.

The National Banks states it will continue strictly controlling the dynamics of the national economy and monitoring the international economic environment in order to ensure the goal of the mid-term monetary policy, namely to achieve and maintain the price stability by adequate using monetary policy instruments.