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Hardest hit: A pensioner cries at a recent protest rally in Tiraspol against high prices. (Photo: Ekaterina Semenyuk)

TIRASPOL (Tiraspol Times) - Echoing the effects of a worldwide hike in the cost of oil as well as widespread global food price increases, inflation in Pridnestrovie is shooting way over target. Government officials fear that local inflation will set a worrying record this year of more than three times as much as expected.

During the first four months of 2008 the inflation rate in Pridnestrovie (also known as Transdniester or Transnistria) reached 15.78%. This was reported on 26 May 2008 by the Public Service Commission of Statistics in the PMR Ministry of Economy, based in Tiraspol.

With price hikes of almost 16% in the first four months, the yearly target of an estimated 12% inflation rate for the entire 2008 has already been left in the dust.

This comes after record price hikes which have been driven mostly by a global increase in food prices. According to the ministry, in April inflation slowed to 2.85% after a one-month increase of a whopping 4.5% in March. As in other countries around the world, the cost of food was the main culprit for higher prices across the board. Food in the month of April went up by 7.38%, while services increased 2.77% and non-food products saw a 1.89% rise.

The civil service of statistics in the PMR Ministry of Economy registered a two month increase for January-February 2008 of a 7.7% inflation rate. The rate for these two months had been projected at 4%.

In terms of inflation, 2007 was disastrous for Pridnestrovie as well. The inflation for 2007 had originally been estimated by the government at 10% but actual inflation stood at 29.4% by the close of the year.

Elderly hardest hit

For all of 2008, inflation in Pridnestrovie is officially estimated to clock in at 12%. However, in the face of the just-released 15.78% it is clear that a revised estimate is needed. Several of Pridnestrovie's ten political parties have already called for additional increases in the minimum wage and higher pensions.

The hardest hit by rising prices are pensioners and other socially vulnerable groups on fixed incomes. Having maintained much of the social safety net of the former Soviet Union, the state in Pridnestrovie provides its aging population with pensions from public funds. These are adjusted upwards once a year but are failing to keep pace with increasing inflation.

At a protest rally organized in Pridnestrovie's capital on 17 May, two left wing opposition parties gathered around 2,000 followers to protest against rising prices. The Pridnestrovie Communist Party and the Social Democrats of Pridnestrovie signed a joint communique urging PMR President Igor Smirnov to resign in the face of what they perceive as a worsening of living standards for the country's retirees.

The protest rally drew a mostly elderly crowd, many of whom were openly nostalgic for the lack of inflation of the now-dissolved Soviet Union. Some of the pensioners even shed a tear as they compared their Soviet past with the rampant inflation of today's more open and free market oriented Pridnestrovie.

Their only consolation: Inflation in neighboring Moldova is trending even higher, while pensions and minimum wages are slightly lower.

See also:
» Exchange rate of PMR's currency holds its own against inflation [1]
» Left-wing opposition demands Smirnov's resignation at Tiraspol protest rally [2]