Signing of Association Agreement with EU, economic growth described as economic achievements in 2014

Chisinau, 30 December /MOLDPRES/- The signing of the Association Agreement with the EU and a 4.7-per cent economic growth have been included in a Top 5 economic achievements of 2014, conducted by the Expert-Grup Independent Centre. The experts launched the seventh annual "radiography" of the Moldovan economy, which includes three top 5 of economic achievements and failures of 2014, as well as economic challenges from 2015, in a random order.

The 2014 year was marked by populist economic policies, with the nearing of the parliamentary elections and which have often been to the detriment of economic reasons, the publication's authors said.

As for the top 5 economic achievements of 2014, Moldova may be proud of the signing of the Association Agreement with the EU, which will bring deeper economic and political relations, structural reforms and financial assistance worth at least 500 million euros for the next three years. The signing of the Association Agreement came up along with the abolition of the visa regime for Moldovans, which brought benefits easy to understand, the centre's economists said.

They said the 4.7-per cent growth in the first three quarters of 2014 was worth being noted as economic success, as it came against the background of difficult regional situation and a high comparative benchmark (in 2013, GDP increased by 9.4 per cent). Also, "in 2014, the first steps to energy security were made, by the launch of the Iasi-Ungheni gas pipeline, and adoption of  a new Education Code is meant to increase relevance of studies to national economic requirements."

In terms of economic failures in 2014, the centre mentions worsening of the relations with Russia, which ruled to adopt punitive measures, following the signing of the Association Agreement, suspicious transactions in the banking system that have undermined public confidence in banks, failure to implement recommendations of the programme on assessing the financial sector, worked out by the International Monetary Fund. Besides, the internal and external difficult economic conditions led to a decrease in direct foreign investments, and the parliamentary polls "brought" more populist measures to the detriment of structural reforms.

The publication's authors expect the 2015 year to  be pretty difficult. The structural reforms run the risk of coming with delay due to the fragility of the pro-European parliamentary majority, and the Transnistrian region continues to "isolate itself" by its refusal to implement the Association Agreement, despite the fact that 60 per cent of exports from the region come to the EU market. Also, Ukraine's continuous destabilisation and Russia's economic recession from also run the risk of undermining the economic progress in 2015. Moreover, the increase in the budget deficit as a result of the 2014 populist measures could create fiscal imbalances at central and local levels, the centre said.