Effects of interest rate hikes yet to be felt, price pressure to ease in next period: university professor
Skopje, 10 August 2022 (MIA) – The National Bank has demonstrated clear steps to stabilize inflation expectations and respond to inflation in the medium-term perspective, so the effects of interest rate hikes are yet to be felt, as it takes some time to see the effects, university professor Marjan Petreski told MIA, commenting on the central bank's latest decision not to increase the base interest rate in conditions of inflation.
According to Petreski, July saw the peak of inflation and as of August, if there’s no new shock which cannot be predicted now, monthly inflation will significantly drop, thus annual inflation as well, including as a result of last year’s base effect.
“In this period, pressure on food prices eased at a global level, and an additional effect is expected from the agreement between Russia and Ukraine, mediated by Turkey, for the export of grain. Pressure on energy prices is still present, but more stable than before. In such circumstances, it is to be expected that the reaction of the domestic monetary policy remains mild, because risks to growth are still pronounced, and inflation is predominantly affected by global developments, with a rate that reflects the fact that in our country, food and energy have a greater share in the consumption basket of the citizens, compared to the EU countries and some neighboring countries,” Petreski said.
