Top European bank revises upwards estimations on Moldovan economy's evolution in 2016, 2017

Chisinau, 4 November /MOLDPRES/ - The European Bank for Reconstruction and Development (EBRD) has revised upwards to 1.5 per cent the estimations on the Moldovan economy’s advancement in this year, from the stagnation anticipated in last May, according to EBRD’s Regional Economic Prospects report, launched on 3 November.   

EBRD experts forecast a 2.5-per cent increase in the Gross Domestic Product (GDP) in 2017, by 0.5 percentage points more than earlier expected. The prospects for 2016 and 2017 are above the region’s average. EBRD revised downwards the forecast for Eastern Europe and Caucasus, a region in which Moldova is included too, from minus 0.2 per cent, as anticipated in May 2016, to minus 0.4 per cent, as a result of more pessimistic expectations on the evolution of Ukraine’s economy, and an advance of 1.7 per cent in 2017.    

“Moldova’s economy has returned to a moderate growth in the first half of 2016. The GDP rose by 1.3 per cent, backed by increase in the domestic consumption. The gross fixed capital formation and the exports in goods and services have dropped. The cut in exports and remittances slowed down in the first half of 2016, contributing to a decrease in the budget deficit. The toughening of the tax and monetary policy helped get the inflation back to a single figure and maintain the reserves to a level allowing the covering of six months of imports,” EBRD said.   

The public debt is expected to increase significantly, mainly, as a result of the support provided to the three fraud-hit banks in 2015.The biggest three banks have remained under the special supervision of BNM, against the background of concerns about the right to property, problems dealing with crediting and weak corporate governance, EBRD experts also said. They specified that the expected approval of a new programme with the International Monetary Fund would unlock the budgetary support on behalf of other donors.  

“The return to economic growth in Ukraine and Moldova in 2016, as well as the growth in Armenia and Georgia, is expected to partially compensate the negative prospects for Azerbaijan and Belarus,” the report reads.  

According to EBRD, Romania’s economy will grow by 4.8 per cent in 2016, Ukraine’s one – by 1.5 per cent, while Russia will record a decline of 0.6 per cent.   

The Economics Ministry forecasts a two-per cent rise in the GDP in 2016 and a three-per cent one in 2017. At the same time, the World Bank anticipates a 1.7-per cent growth in 2016 and, respectively, a 2.2-per cent increase in 2017. 

(Reporter V. Bercu, editor L. Alcaza)