Top European bank reviews in forecast of Moldovan economic growth in 2015 to minus 2 per cent

Chisinau, 14 May /MOLDPRES/ - The European Bank for Reconstruction and Development (EBRD) reduced the forecasts of economic growth of Moldova for 2015 to -2.0 per cent, from a stagnation at the level of 0 per cent, as it anticipated in last January, according to EBRD report on regional economic prospects, made public today.

The Moldovan economy will slow down, as a result of the negative impact of the geopolitical situation in the region, decrease in remittances and exports, as well as the economic recession in Russia and Ukraine, - two of Moldova’s traditional trade partners. EBRD anticipates a fall down of the Ukrainian Gross Domestic Product by 7.5 per cent and of the Russian economy by 4.5 per cent.

After a 4.6-per-cent increase in 2014, the prospects for economic growth of Moldova worsened due to a drop of remittances and exports, triggered by the redirection of foreign trade from Russia to the European Union, with which Moldova signed the Free Trade Agreement, the report’s authors say. They specify that the financial sector „got stuck in scandals”, related to the three banks under special administration.

The Moldovan leu has depreciated in early 2015, in a pace with the trends of the regional foreign exchange markets; yet, the exchange rate stabilised in March after the currency policy had been toughened and the central bank intervened, the EBRD report reads.

EBRD also highlights that the results of the first quarter show that the structural economic blockades, financial sector challenges exacerbate the impact of foreign shocks on the Moldovan economy.

EBRD expects a decline of the economies of the Eastern Europe and Caucasus region, which also includes Moldova, by an average of 3.3 per cent in 2015, against -1.8 per cent as the bank estimated in past January.

A recovery with an 1.5-per cent advance of Moldova’s economy in 2016 is possible, if the regional situation improves, EBRD experts say. They expect a rise by an average of 1.8 per cent in the Eastern Europe and Caucasus in 2016, but the recession of the Russian economy will continue with a decline of 1.8 per cent.

The Economics Ministry and International Monetary Fund forecast a decrease of the economy by 1 per cent in 2015. The World Bank anticipates a two-per-cent recession of the Moldovan economy, in the wake of the regional crisis, reduction of foreign demand, money transfers and financing. Experts of the Expert-Grup Independent Analytical Centre forecast a decrease of 2.0 per cent of the Gross Domestic Product, if optimistic developments noted, whereas pessimistic forecasts show a diminution of 1.8 per cent. IDIS ”Viitorul” experts expect a  four-per cent decrease in GDP.

(Reporter V. Bercu, Editor M. Jantovan)