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Posted by: Golban Ionela

News / Economic

30 May 2022 / 15:39

Inflation in the Republic of Moldova - causes and repercussions, opinions

Inflation in the Republic of Moldova is caused both by external factors, such as rising energy prices and the war in Ukraine, and by internal factors, especially high consumption of citizens and the late adoption of measures, he said in a public debate on "Prices and inflation through political, economic and social perspectives", the deputy of the Action and Solidarity Party (PAS), Dumitru Alaiba, reports Radio Moldova.

On the other hand, the opposition deputy, Petru Burduja, considers that the authorities are to blame, as they did not intervene with certain mechanisms.

The high rate of inflation in the Republic of Moldova is largely caused by external factors, such as the high volume of imports, energy prices and the war in the region. "However, domestic consumption, certain measures adopted late, but also the monopolists in certain areas, also contributed significantly to the increase of inflation", mentioned the chairman of the Parliamentary Commission "Economy, Budget and Finance", Dumitru Alaiba. According to him, the guilty persons will be sanctioned.

"What fueled inflation long before the war was the price of energy. We are very dependent on the port of Odessa, both imports and exports mean rising costs. Domestic causes, inflation began to rise in June last year, the central bank did not act much until September. Consumer loans have gotten out of control, the monopolists and the so-called speculators who triple their profits on this," said Dumitru Alaiba.

In addition, the National Bank of Moldova (NBM), which is responsible for this area, also needs more active involvement from the authorities, said Petru Burduja, Deputy Chairman of the Parliamentary Committee on Economy, Budget and Finance. He gives the example of bakery products whose prices have risen significantly and unjustifiably.

„Acţiunile întreprinse de BNM, într-adevăr sunt întârziate, totuşi, nu doar numai BNM  acela care este de vină în situaţia respectivă, pentru că în anul 2021 Republica Moldova, prima dată în istorie din ultimii 30 de ani au avut o producţie de produse cerealiere de circa un milion cinci sute de tone, lucru care ar însemna că oferta a crescut, iar preţurile la pâine oricum cresc,” a spus Burduja. 

The state has several tools to influence the economic situation in the country, but in order to find the most effective measures, more communication is needed both at the level of the authorities and at the level of society, considers the political analyst Igor Botan.

"The state has instruments of influence, excise duties, VAT, playing with these instruments. There are computerised models as we start from the market situation. The debate between the rulers and the qualified opposition, with arguments, is absolutely necessary so that those who are responsible can make the best decisions," concluded the analyst Igor Botan.

TRM.MD recalls that the inflation rate in the Republic of Moldova exceeded 27% at the beginning of this month, and the NBM predicted that it would exceed 30% in a few months, followed by a downward trend. At the same time, it should be said that in order to control inflation, the NBM gradually increased the base rate from 2.65% in November 2020 to 15.5% today. During this year the base rate was increased 3 times.

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