The NBS Head Office Building was built from 1888 – 1890, on the basis of blueprints designed by Konstantin Jovanovic (Vienna 1849 – Zurich 1923), son to distinguished artist Anastas Jovanovic...
12/05/2022
According to Statistical Office data, April inflation amounted to 1.5%, while relative to April 2021 it equalled 9.6%, which is in line with NBS expectations.
The monthly inflation dynamics was again dictated by the rise in food prices, prices within core inflation (CPI excluding food, energy, alcohol and cigarettes) and energy prices.
The monthly inflation of 1.5% was mostly affected by the 5.6% rise in unprocessed food prices, notably vegetables and fresh meat. M-o-m growth in processed food prices in April equalled 1.1%, similar to the dynamics recorded since the beginning of the year and slower than in October and November 2021, when the monthly rise in these prices averaged around 2%. The softening of processed food price growth continues to reflect, inter alia, Government measures capping the prices of basic foodstuffs. Relative to April 2021, processed and unprocessed food prices increased by 11.4% and 24.6%, respectively. For the most part, the robust y-o-y growth in food prices is driven by supply-side factors on which monetary policy measures have a limited effect – the increase of all input costs in food production.
At the monthly level, energy prices edged up 1.5% in April, propped by the continued growth of petroleum products of 2.9%, as well as the hike in the prices of solid fuels.
Monthly growth within core inflation was 1.0%. In contrast to some Central and Southeast European countries pursuing the inflation targeting regime, y-o-y core inflation (CPI excluding the prices of food, energy, alcohol and cigarettes), which can be affected by monetary policy measures to a larger extent, continued to be significantly lower than headline inflation and amounted to 5.5% in April, supported by the relative stability of the exchange rate that has been maintained even in these extremely uncertain global conditions. Another important factor contributing to low and stable core inflation are the anchored medium-term inflation expectations of the financial sector, which have been within the target tolerance band for quite a while.
Under our latest forecasts, we still expect inflation to strike a downward path in the second half of the year. It will most likely return within the target tolerance band in the second half of 2023, and then continue to slow down until the end of the projection horizon.
A more detailed analysis of the factors affecting inflation movements, as well as the NBS’s latest projections going forward, will be published in the May Inflation Report, which will be presented at a press conference scheduled for Wednesday, 18 May.
Governor’s Office
