Top bank expects recession of Moldovan economy in 2015

Chisinau, 8 April /MOLDPRES/ - The World Bank (WB) anticipates a two-per cent recession of the Moldovan economy in 2015, as a result of the regional crisis, diminishing of external demand, money transfers and funds. WB experts decreased the growth forecasts by 1.5 per cent for 2016, according to the updated economic forecast unveiled in Chisinau today.

WB has palpably reduced the prognosis of economic growth against October 2014, when it anticipated an advance of two per cent in 2014 and a growth speed-up of 3-5 per cent for 2015-2017. The experts consider that, although Moldova’s economy had good results in 2014, the regional and local unfriendly environment started affecting the economic growth. The consumer price index increased to the upper limit of the target set by the National Bank of Moldova.

”The economic decline in Russia affected the remittances to Moldova and public incomes. We anticipate that Moldova’s economic development will result in a recession of 2 per cent in 2015. We also reduced the forecast of GDP’s rise by 1.5 per cent for 2016,” Superior Economist at World Bank Office Moldova Ruslan Plontkivsky said.

The World Bank said Moldova stayed vulnerable to risks related to external environment, fiscal pressure and low capacity of the financial sector. The authorities are to recognise the losses inflicted to the state in the banking sector, review the prudent supervision and improve the sector’s regulation, so as to minimise future risks.

To re-establish trust in economy, the government might carry out decisive actions to regulate the banking sector, along with applying monetary policies in order to control inflation.

The Economics Ministry forecasts a decrease of economy by 1 per cent in 2015, after an 4.6-per cent  increase in 2014, an annual average of the Moldovan leu's exchange rate of 19.5 lei per dollar and an inflation rate of 7.6 per cent by the end of 2015. The ministry also anticipates a ten-per cent decrease in exports and 15-per cent in imports.

(Reporter V. Bercu, Editor L. Alcaza)