Purchasing Power of the Population of the Republic of Moldova Under Inflation Pressure: A Comparative Analysis of Income and Expenditure

Abstract

The dynamics of income, expenditure and inflation rate have a significant impact on the purchasing power of the population of the Republic of Moldova. To determine real growth, the analysis of average income per capita must include the evolution of prices. The income structure includes salaries, pensions, remittances and income from independent activities, each of which has its own dynamics. The consumption of essential goods, such as food and utilities, dominates the population's expenditures, and the household budget is directly affected by the increase in the prices of these products. The reduction in the quantity of goods and services that can be purchased with the same nominal income is an example of the effect of inflation on purchasing power. To mitigate the negative effects of inflation, economic policies are needed that stimulate the growth of real incomes, control inflation and protect vulnerable groups of the population. CZU: 330.564.2:336.748.12(478); JEL: C1, E4, O1