Welfare Level of Population in the Context of Prices Evolution in the Republic of Moldova

Abstract

Recent evolutions in the prices of energy resources and consumer goods have caused major pressures on household incomes. Thus, the share of expenses for food products and the payment of bills for consumed energy resources constitute more than half of the families’ budget in the Republic of Moldova. The real expenses for the mentioned goods and services would have been substantially higher if the state institutions had not intervened in the support of the population by: capping the commercial addition to socially important products, establishing reduced rates of Value Added Tax, granting compensations when paying invoices for the use natural gas, electric and thermal energy. Through this policy, the state aims to minimize the impact of inflation on real incomes and, respectively, on the purchasing power and the level of well-being of the population.