## MOLDOVA — Report on Consumer Price Index Mission (June 27–July 1, 2022)

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**Canonical URL:** [MOLDOVA — Report on Consumer Price Index Mission (June 27–July 1, 2022)](https://www.imf.org/-/media/files/publications/cr/2022/english/1mdaea2022007.pdf)

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### Summary of Mission Outcomes and Priority Recommendations
- Mission conducted June 27–July 1, 2022 at the request of the National Bureau of Statistics of the Republic of Moldova (NBS) to review CPI methodology.
- Overall assessment: current methods are largely aligned with the Consumer Price Index Manual: Concepts and Methods (CPI Manual); recommended improvements focus on sampling, pricing of airfares, telecommunications and rents, CPI software functionality, and initial steps toward modernization with new data sources.
- Current coverage: urban coverage with eight cities being covered both by price and expenditures data collection.
- Noted macro context: Moldova is currently facing annual inflation of approximately 30 percent.
- Key operational recommendations:
  - Assess feasibility and pertinence of extending CPI coverage to rural areas (villages).
  - Continue selecting city sample using population data (expenditures data not available at city level).
  - Move from non-probability product/variety selection toward use of additional data sources such as scanner data to better inform sampling.
  - Modify compilation software to process all publication indicators (year-on-year rates of change, category contributions, core inflation measures, special aggregates).
  - Provide guidance on pricing and weighting for regulated public transportation fares under the new pricing schema effective July 1.
  - Improve sampling for airfares using tourism statistics, expand telecommunications coverage to include bundled packages via the profile approach, and request rent data from the tax authority.

### Priority Recommendations (selected from the mission action plan)
- September 2022: Implement new weighted average methodology for public transportation services. — Responsible: NBS
- December 2022: Update the current methodology paper to reflect recent improvements. — Responsible: NBS
- December 2022: Modify the compilation software to complete all calculations needed for the monthly release. — Responsible: NBS
- December 2022: Start engaging with major retailers to obtain scanner data. — Responsible: NBS
- January 2023: Expand the compilation of core inflation measures and special aggregates having clear indication of which ECOICOP classes are included.
- January 2023: Use the profile approach to expand coverage of telecommunication services to include packages.
- January 2023: Improve samples of airfares with data available from the tourism statistics.
- December 2023: Update the instructions manual for price collection.
- December 2023: Assess the feasibility and pertinence of extending the coverage to rural areas.

### Detailed Technical Assessment — Background, Sampling, Index Calculation, and Dissemination
- CPI history and classification:
  - CPI published since 1991.
  - ECOICOP implemented since January 2021.
  - Index reference period: 2015.
- Weights and levels:
  - Weights updated annually and kept fixed for the year.
  - Weights at COICOP 4-digit level from national accounts; additional detailed weights to 6-digit level from the HBS.
- Sampling and coverage:
  - Current urban-only coverage with eight cities; mission recommends assessing expanding to rural areas by selecting relevant villages by population and turnover or number of shops (if data available).
  - Cities sample should continue being made using population data due to lack of city-level expenditure data.
- Special aggregates and core inflation:
  - Several special aggregates are published for core inflation; mission advises continuation of the three “traditional” special aggregates – food, non-food and services – for regional comparability.
  - Special aggregates should explicitly indicate which ECOICOP classes are included; examples of required accompanying information were provided.
- CPI documentation and tools:
  - NBS should update the CPI methodology paper on the website as a living document; update the price collection instructions manual whenever methods change.
  - Current index compilation software processes monthly indices for the 12 COICOP classes, for the 4-digit level and for elementary aggregates only; rates of change and special aggregates are compiled in excel. Software should be enhanced to produce all publication outputs including year-on-year rates, contribution breakdowns, core inflation measures and special aggregates.

Recommended actions (selection):
- Expand compilation of core inflation measures and special aggregates with clear ECOICOP class listings.
- Update CPI methodology document and price collection instructions.
- Assess extending CPI coverage to rural areas.
- Update index calculation software.

### Detailed Technical Assessment — Price Collection
- Treatment of discounts:
  - Discounts included only if universal, refer to a single product, and are received immediately or shortly after purchase.
  - Discounts for damaged/near-expiry products are excluded as lower-quality and not directly comparable; this aligns with international best practices.
- Missing prices:
  - Missing prices are estimated by multiplying the previous price by the observed monthly rate of change of other products within the same elementary aggregate. Carrying forward the last observed price is not used.
- Seasonal products:
  - Seasonal annual calendar used only for food currently; mission recommends adopting the seasonal annual calendar for clothing and other seasonal products.
  - Off-season prices should be estimated using the “typical” or average price of the in-season period; extreme prices should be disregarded.
  - Index calculation software must allow for prices other than the last observed price for seasonal imputations.
- Gas and heating services:
  - Subsidized from November 2021 through March 2022; subsidies discontinued in April leading to price increases.
  - Weights obtained from annual expenditures should remain stable for the year; counter-seasonal weights are not appropriate for gas at the same ECOICOP level; treating gas as seasonal would not be fully correct and would still lead to imputation-based increases.
- Public transportation fares:
  - Prices for public transportation services regulated; new pricing schema implemented from July 1.
  - Previously two ticket types: monthly and single trip; discounts for seniors and students.
  - From July new quarterly and bi-annual tickets introduced; single ticket prices increase from two to six lei.
  - Recommendation: remove the word “monthly” from product definition for passes; implement a new weighted average of regulated prices using expenditures for each type of pass sold through July 30 as weights (weights fixed during 2022). In January 2023, update weights using data for the six previous months.
- Airfares:
  - Improvements recommended using tourism statistics: sample major airlines and within those the most popular destinations.
  - Each airfare transaction should specify class of service, origin-destination, flight day-of-week, and purchase lead time.
  - Timing of price recording: date when the service commences (not when ticket purchased); flights on last days of month may be recorded during first days of month.
  - Seasonality must be considered; some destinations are seasonal and should be treated as seasonal products.
  - Airfare prices currently collected online (good practice).
- Telecommunications:
  - Currently included but without bundled packages (subscriptions including data, national and international calls).
  - Recommendation: adopt a profile approach to cover bundled packages and select representative packages.
- Scanner data:
  - Obtain scanner data from at least two retailers for past twelve months to assist variety sampling at first stage, and later integrate into CPI.
  - Guidance provided on data specifications and memoranda of understanding with data providers.
  - After receipt, products must be classified to ECOICOP; a learning dataset should be built; initial focus recommended on food products and automated data transmission.
- Data sharing:
  - Data sharing among public institutions (NSO, Central Bank, Ministry of Finance, tax office) is recommended with attention to confidentiality; aggregated data only for private entities.
- Rents:
  - Request rent data from the tax office. Obtain sampling frame listing all rented dwellings with address, dwelling type and characteristics (number of bedrooms, size, etc.) to draw a sample and prepare a survey.
  - Ideally, rent data should be electronically transmitted monthly for all rented dwellings.

Recommended actions (selection):
- Adopt seasonal annual calendar for all seasonal products.
- Use scanner data to sample varieties and later integrate scanner data into CPI.
- Cover all new types of bus passes in price collection and weighting.
- Improve airfare sampling using tourism statistics.
- Investigate existing rent data with the tax authority.
- Use profile approach to include telecommunication packages.

### Officials Met During the Mission
- Oleg Cara — General Director, NBS
- Iurie Mocanu — Deputy General Director, NBS
- Elizaveta Todica — Consumer Prices Division, NBS
- Cristina Condrea — Consumer Prices Division, NBS
- Ina Emelianova — Social and Demographic Statistics Division, NBS

*Source: IMF Technical Assistance Report — Consumer Price Index Mission (June 27–July 1, 2022), prepared July 2022.*

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_Source: https://www.imf.org/-/media/files/publications/cr/2022/english/1mdaea2022007.pdf_