Inflation hits 22% y/y in Moldova

Inflation hits 22% y/y in Moldova
By bne IntelliNews April 13, 2022

Headline inflation in Moldova surged over 22% y/y in March, after consumer prices leapt up by more than 4% over the past month alone, according to the statistics office INS.

Inflationary pressures from energy prices remain high as the country may have to switch to spot market prices after May 1, if Gazprom cuts the gas supplies. In any case, the country already pays some $1,200 per 1,000 cubic metres to the Russian supplier — a price that is not far from the spot market price in Europe.

The government is working to secure financial support from development partners, in order to absorb part of the shock generated by the temporary rise in energy prices. However, there will be a permanent increase in the end-user prices of natural gas and electricity that Moldova’s low-income households will face most likely next winter.

Food prices surged by 27% y/y on average as of March. Prices of vegetables soared by 65% y/y while prices of basic goods (flour, eggs, vegetable oil) advanced by over 20% y/y.

Besides the global rise in commodity prices, Moldova faces direct effects of the war in Ukraine. A large part of its processed food goods was imported from the neighbouring country and retailers had to change suppliers and accept higher prices.

The average price of services increased by 21.4% y/y driven up by the 3.3 times surge in the price of natural gas.