Moldova’s annual consumer price inflation (chart) accelerated to 7.0% in August from 6.4% in July, despite average consumer prices rising only 0.2% m/m, according to data from the National Bureau of Statistics (BNS).

Average consumer prices have remained broadly stable since April, as falling food prices have offset increases in fuel and utility prices. Consequently, food prices rose only 4.7% y/y in August, while non-food prices, including fuels, increased 8.2%. Utility tariffs, including electricity and natural gas, rose 8.1%.

As for the main drivers of the annual inflation rate, fuel prices increased 28% y/y in August, while electricity prices were 24% higher than a year earlier.

The National Bank of Moldova (BNM) expects headline inflation to peak at 8.6% y/y in the fourth quarter of 2026 before gradually easing towards the midpoint of its target range (5%) in the third quarter of 2027.

The BNM raised its policy rate by 50 basis points to 7.5% on August 6, its third increase this year, as it seeks to contain inflationary pressures from higher energy prices and resilient domestic demand.

Energy costs are expected to remain a source of upward pressure. Moldova’s National Agency for Energy Regulation (ANRE) approved a 40.7% increase in the regulated natural gas tariff for households on August 21. The country is importing electricity at increasing prices due to the regional context, and this will eventually surface in higher end-user prices as well. Finally, the government said it would provide heating subsidies to fewer households this winter, which will also impact the average price paid for heating.

Electricity costs are also rising as Moldova relies on imports amid higher regional prices. These costs are expected to feed through to end-user tariffs, adding to pressure on household budgets.

The government is also planning to provide heating subsidies to fewer households this winter, which is expected to increase the average price paid by consumers for heating.

The combination of higher energy tariffs and resilient domestic demand is expected to keep inflation above the BNM’s target range in the near term, despite the stabilisation of overall consumer prices in recent months.