IMF improves forecast of Moldova's economic growth for 2018

Chisinau, 10 July /MOLDPRES/ - The International Monetary Fund (IMF) has improved the forecast of Moldovan economy’s growth for 2018 to 3.8 per cent from 3 per cent, as it anticipated at the previous evaluation of the programme with Moldova. The IMF’s report on the results of the third evaluation of the carrying out of the cooperation programme with Moldova estimates that the Gross Domestic Product (GDP) will reach the level of 163 billion lei by late 2018, against the previous prospects of 160.1 billion lei.    

Data by the Economics and Infrastructure Ministry shows that, in the last four years, Moldova’s GDP had increased in nominal values by 40 billion lei, and an advancement of 50 billion lei is expected in the next three years, till 2021.  

IMF’s experts said that the increase in real incomes of the residents, growth of the remittances from Moldova’s citizens working abroad and the effects triggered by the relaxation of the monetary policy would support the private consumption, while the private investments will cease till the elections. The exports will remain under pressure because of the appreciation of the exchange rate, decrease in agricultural exports and because of the stable domestic demand.  

Thus, this year, the monthly nominal average salary on the economy will increase by 8.7 per cent and will exceed, for the first time ever, an average of 6,180 lei and will reach 8,000 lei in 2021. The next transfers of currency from abroad to private people grew by 18 per cent in the first five months of 2018 and are maintained on the rise, according to the National Bank of Moldova. Forecasts show a 15-per cent  increase in exports this year.

As for the medium-term prospects, Moldovan GDP’s growth is estimated at 3.8 per cent in 2019 and 2020 and at 4 per cent in 2021.

Earlier, the World Bank has anticipated robust increases of the Moldovan economy, against the background of increase of real salaries and improvement of remittances. “The economic growth will be fueled preponderantly by the private consumption. Friendly conditions on foreign markets will stimulate the exports; yet, the contribution of the net trade to GDP’s increase will remain negative, as the imports will extend quickly. The real increase in public transfers and the forecast improvement of capital expenses, with emphasis on the road sector, will back the economic growth on the short-term, especially in the 2018 electoral year,” World Bank experts said.   

The experts noted that “a solid increase is anticipated, which will stand at 3.8 per cent in 2018, 3.7 per cent n 2019, although it will be under the historical average of 4.6 per cent. According to the basic scenario, the fiscal deficits are anticipated to  stay under the level of 2.5 per cent of the GDP on the medium term.”

(Reporter V. Bercu, editor M. Jantovan)