The NBM warns that the main surge in inflation will occur toward the end of this year. In the fourth quarter of 2026, annual inflation could approach 9.2%.
The main reasons for the revision were supply-side shocks, volatility in energy markets (rising fuel and oil prices due to the escalation of the geopolitical conflict in the Middle East), and sustained domestic consumer demand.
Comparison of the NBM’s Macroeconomic Forecasts
The following table shows the trends in key inflation forecast indicators:
|
Indicator |
Forecast from the May 2026 Report | Current Forecast (August 2026) |
Change (p.p.) |
| Average annual inflation for 2026 |
7.0% |
7.2% |
+0.2 |
| Average annual inflation for 2027 |
5.8% |
6.2% |
+0.4 |
| Peak value (4th quarter of 2026) |
8.6% |
9.2% |
+0.6 |
The regulator’s key forecasts are based on the assumption that a return to the target will be delayed. Due to the upward trend, the inflation rate will remain above the upper limit of the target range (5% ± 1.5 percentage points) until the middle of next year. Inflation is now not expected to return to a stable range until at least the third quarter of 2027. A low of 3.5% is projected for early 2028.
“It has become clear why the National Bank decided to tighten monetary policy by raising the base rate from 7% to 7.5% per annum. In deciding to raise the base rate, the NBM acknowledged that inflation will not only fail to stop but will continue to rise. Its decline in June and July—and possibly in August—is the result of a seasonal drop in prices and does not represent a sustainable trend. “So, according to the National Bank’s forecast, price growth will accelerate. This is what prompted the NBM’s recent decision,” says economist Vladimir Golovatyuk.
The expert notes that the NBM raised its forecast for average annual inflation not only for the fourth quarter of 2026 but also for the year as a whole—from 7.0% to 7.2%.
According to the National Bank’s February forecast, annual inflation in the fourth quarter of 2026 would have been 5%; according to the May forecast, 8.6%; and according to the updated August forecast, annual inflation will reach 9.2%.
To curb the secondary effects of rising energy prices and protect citizens’ purchasing power, the NBM has already begun tightening its policy by preemptively raising the base rate to 7.5% per annum. And this increase may not be the last.
It’s All About the Base
According to the NBM’s updated Inflation Report, the forecast for core inflation has also been revised upward for virtually the entire forecast period.
While the current actual core inflation rate (inflation excluding seasonal goods, fuel, and regulated tariffs) shows relative stability—standing at 5.16% in the second quarter of 2026— in the medium term, the regulator expects pressure to intensify.
“The fact is that when deciding on the use of monetary policy instruments, the NBM bases its decisions not on data regarding the overall inflation rate, but on information about core inflation, which is ‘adjusted’ for seasonal fluctuations and administratively set prices and tariffs. And here the picture is different,” explains Vladimir Golovatyuk, outlining the regulator’s logic.
According to him, “while the overall inflation rate declined during the summer months, core inflation, on the contrary, rose from 5% in April to 5.5% in July.”
The average annual growth rate of core inflation in 2026–2027 is expected to remain in the range of 5.5%–6.0%, temporarily exceeding the bank’s medium-term target (5.0%).
The fact is that, unlike the overall consumer price index (CPI), which is most severely affected by sharp spikes in fuel prices, core inflation rises more slowly but is more persistent.
The NBM has revised its forecast upward due to the pass-through of costs from higher logistics and energy prices to the final prices of a broader range of goods and services (secondary effects).
According to experts, the only supporting factor here could be domestic demand, which the regulator is trying to curb. Although, of course, supply shocks are the primary factor. It is much more difficult for the Moldovan government to deal with them.
Interest rates on loans and moderate but steady growth in the wage bill and social benefits will keep domestic consumer demand at a stable level, preventing core inflation from falling rapidly below the 5% target.
Risks That Could Accelerate Inflation Even Further
The NBM identifies several domestic and external factors that could trigger further growth in core inflation. Everything will depend, first, on the extent to which energy cost increases are passed on, and second, on domestic and foreign policy.
The faster businesses pass on the increased transportation and electricity rates to the cost of everyday goods, the greater the burden on citizens’ wallets will become—not to mention the rise in utility bills.
According to experts’ forecasts, the stronger-than-expected secondary and direct impact of energy shocks on regulated prices and transportation services may make this process not rapid, but protracted. And inflationary pressure on the economy will not be limited to this year.
The protracted crisis in the Middle East will continue to put pressure on global supply chains, especially in the run-up to the winter season and given the ruling majority’s geopolitical “priorities” of the ruling majority regarding energy and food security, support for local production, and dependence on external inflows.
The need to boost budget revenues and adjust tax revenues to stimulate at least some economic growth will, of course, affect domestic demand.
The only question—what to sacrifice in the name of “fighting inflation”—seems no longer relevant…
NBM Forecast:
➢ International oil prices have been revised downward amid expectations of an increase in global oil production, while natural gas prices in Europe have been revised upward in light of geopolitical risks;
➢ International food prices have been revised upward for 2026–2027 due to disruptions in supply chains and international trade flows
➢ The annual inflation rate will exceed the upper bound of the inflation target range for four consecutive quarters; thereafter, starting in the third quarter of 2027, it will return to and remain within the range through the end of the forecast period.
➢ The annual inflation rate will peak at 9.2 percent in the fourth quarter of 2026 and bottom out at 3.5 percent in the first and second quarters of 2028.
➢ Average annual inflation will be 7.2 percent in 2026 and 6.2 percent in 2027.
➢The annual inflation rate will be driven by positive contributions from core inflation, food prices, regulated prices, and fuel prices.
