Consumer price inflation in Moldova (chart) eased for the second consecutive month to 7.3% y/y in August from 7.9% y/y in July, the lowest reading since prices suddenly rose in January, prompted by a temporary crisis in the electricity system after Russia cut its deliveries overnight.

Consumer prices actually decreased in August compared to July, by 0.36% m/m, dragged down by all three major categories, particularly that of food goods, where seasonality was a key factor according to data published by the statistics bureau BNS on September 11.

Moldova’s National Energy Regulatory Agency (ANRE) has approved cuts to regulated electricity prices of 12.5% for Premier Energy customers and 14.5% for FEE Nord customers, effective August 1, and this contributed significantly.

The CORE inflation, however, also eased – to 5.6% y/y in August from 6.1% y/y in July. 

Moldova’s central bank expects year-end inflation at 6.8% this year and 3.8% one year later.

Food prices dropped by 0.75% m/m but retain a still significant 8.45% y/y advance. The prices of fruits (+31% y/y), vegetables (+18% y/y) and edible oil (+16% y/y) have particularly contributed.

The prices in the category of non-food goods have increased by only 2.16% y/y – but this category does not include, in Moldova, the prices of electricity and natural gas that are counted in the category of utilities. The average price of car fuels has notably decreased by 2.25% y/y.

The category of services posted the sharpest annual advance among the three, namely 13.11% y/y pushed up by the price of natural gas (+28% y/y), electricity (+18% y/y) and district heating (+33% y/y). The three categories account for 7.5% of the consumption basket and contributed 1.8 percentage points to the 7.3% y/y advance.