World Bank forecasts 0.5-per cent economic growth of Moldova in 2016

Chisinau, 8 June /MOLDPRES/- The World Bank (WB) maintains its forecast on 0.5-per cent growth of Moldovan economy in 2016, according to the Global Economic Prospects report, published by the international financial institution on 8 June.

“Belarus and Moldova, closely linked to the economies of Russia and Ukraine, entered a recession in 2015 and recorded steep declines in industrial production in early 2016”, the report reads.

The report’s authors also note that a greater recession in Russia would affect the neighboring countries (Armenia, Belarus, Georgia, Kyrgyzstan, Moldova, Tajikistan and Uzbekistan) by reduced remittance flows and decreasing demand for import from these countries. Moldova’s economy is to accelerate to 4 per cent in 2017.

“In terms of policy for constraining domestic demand and exchange rate adjustment, we estimate that net exports should be the dominant factor of growth. The low level of remittances and high financing costs on domestic market, coupled with lack of investor confidence after the fraud in the banking system will limit domestic absorption. We estimate an increase in budget deficit up to 3.2 per cent of GDP in 2016. Consequently, we expect a modest decrease in poverty level in 2016, less than one percent,” the WB experts said.

The European Bank for Reconstruction and Development anticipates Moldovan economic stagnation in 2016 at zero level and 2-per cent-economic growth in 2017, and the Economics Ministry forecasts a 1-per cent increase in 2016 and a 4-per cent advance during next years.

(Reporter V. Bercu, editor L. Alcază)