Moldova’s business barometer decreases, slips into negative zone

Chisinau, 22 March /MOLDPRES/-The Moldovan-German Economic Cooperation Civil Association in collaboration with the Chamber of Commerce and Industry France-Moldova unveiled the Business Barometer today. According to it, companies are highly cautious and do not expect an improvement in their business activity in the first quarter of 2016. Local enterprises are waiting for some changes, while foreign companies are more pessimistic.

“Political and social disputes preceding the creation of the new government, the uncertainty of the macro-economic and financial situation, lack of an agreement with the International Monetary Fund (IMF), as well as the lack of international aid caused by the failure to implement the long-awaited reforms, have largely hurt the general tendencies of the business barometer over the fourth quarter of 2015,” the head of France-Moldova CCI, Emmanuel Skoulios said.

Regardless if a business is local or foreign, the barometer’s general tendency is decreasing and even reaching its negative zone. According to a survey carried out by Magenta Consulting marketing and consultancy company, the local context is mostly hurting owners of foreign companies. The highest drop was recorded in the finance, banking and insurance sectors.

Surveyed companies continue to expect a slight increase in their business activity. There is no essential difference between local and foreign companies in this area. “The results in the banking, finance and insurance sectors, were much higher in the fourth quarter of 2015, against the results forecast and expected during the third quarter. However, representatives of these sectors are pessimistic about their business turnover in the next period,” Skoulios said.

On the other hand, Skoulios noted that investors continued to be willing to invest in Moldova and that it was “the only optimistic indicator”, though foreign companies are very little or almost not interested in investing. Banking and insurance institutions are expecting to reduce their investments in the next quarter as well.

The number of employees in these institutions has also slightly decreased in the last quarter of 2015, though it was initially supposed to increase. The tendency for the next quarter is, however, less positive. Local enterprises plan on slowly enlarging their staff, while foreign companies have a neutral position on that. Just like in other areas, foreign investors are cautious, while the manufacturing sector is not planning on hiring new staff.

Surveyed companies continue to be extremely negative about the business environment and its evolution. This indicator is clearly situated in the barometer’s red zone and expectations for the first quarter of 2016 are not very encouraging.

The survey was carried out during 18 January-5 February 2016, on a sample of 562 local and foreign companies throughout Moldova.

(Reporter V. Bercu, Editor A. Raileanu)