National Bank on a “Heightened Alert” State

As a result of rising energy prices, inflationary pressures may intensify until the first quarter of 2027; consequently, the National Bank (NBM) has partially revised its February forecast and moved to a state of heightened alert. The inflation rate in February 2026 turned out to be slightly higher than expected – annual inflation stood at 5.06% (+0.22 percentage points compared to January). And this rise began even before the events in the Middle East unfolded. In terms of structure, the annual inflation rate in February was mainly driven, according to the NBM, by “rising food prices, core inflation and fuel prices, partially offset by a fall in regulated prices”. Aggregate demand remained subdued and continued to exert a disinflationary influence on prices, reports Logos-Press. The central bank is still pinning its hopes on the disinflationary impact of demand and reduced consumption, even now that the country’s dependence on energy sources, global food prices and raw materials has begun to rise. According to the NBM, a “modest rise in international food prices” is expected in 2026 and 2027. At the same time, “a reduction in fertilizer supplies to the global market as a result of ongoing regional conflicts will drive up costs in agriculture, particularly next year”, the bank commented on its decision yesterday to keep the base rate unchanged (at 5% per annum). At the same time, the central bank has announced that it will be paying particular attention to prices so that it can intervene in a timely manner. If the risk of high international prices for energy, food and raw materials persists, it will take “appropriate restrictive monetary policy measures to combat inflationary pressures and the secondary effects of supply shocks, with the aim of achieving the fundamental objective of maintaining price stability”.