Economy of Moldova: Inflation has increased to 30.24 percent

Moldova’s Economy: Inflation has increased to 30.24 percent

Moldova’s economy consumer prices increased by 30.24% in December 2021 as the tiny nation bordering Ukraine suffered the financial effects of Russia’s war on its neighbor.

According to the National Bureau of Statistics, increasing costs for services and food items were a major contributor to inflation last year.  food costs jumped by 31.8% last year, while service prices increased by 43.97%.

According to the International Monetary Fund (IMF), the 2.6 million-person nation’s living standards have declined. IMF stated earlier this week that disruptions in the electricity supply and high food and energy prices were to blame.

According to the statistics office, Moldova’s government’s decision to give households financial assistance with their energy costs slowed the inflation rate in 2022.

This week, the IMF granted a new $27 million tranche for Moldova under its Extended Credit Facility but noted that the outlook was still difficult.

Due to the prolonged effects of Russia’s war against Ukraine and the weakening outlook of Moldova’s main trading partners, the economy is expected to decrease by 1.5 percent in 2022, followed by a minor recovery of 1.5 percent in 2023, it said in a statement. In 2021, the consumer price index for Moldova was 13.94%.

More About Moldova’s Economy

Agricultural machinery, food processing, foundry equipment, freezers and refrigerators, washing machines, hosiery, shoes, textiles, sugar processing, and vegetable oil production are Moldova’s primary industries.

Agricultural and food items are the biggest contributors to Moldova’s exports. In contrast, cars and vehicle components contribute to Romania’s exports.

The energy sector is substantially different, mostly due to Moldova’s regrettable loss of its key energy facilities, which were located in Transnistria (a separatist pro-Russian enclave).

Moldova and Ukraine would still be prosperous because they have survived despite their problems with Russia. It is preferable for a nation to be recognized as poor. And receive aid from abroad rather than pretend everything is OK while internally disintegrating. Although Ukraine and Moldova are not yet stable, they will be in due course. Both nations have learned to deal with their problems and difficulties.

Given that both Ukraine and Moldova have the same aspirations for the European Union, they might eventually join. Both nations will improve over time. The difficulties they currently confront is momentary. It will only serve as an exciting and energizing chapter in their histories once they achieve stability. Therefore, Ukraine is superior to Belarus. In contrast to Belarus, Ukraine has recently seen many developments.

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