Expert-Grup centre of Moldova launches ranking of most important events of 2019, top of principal challenges for 2020

Chisinau, 19 December /MOLDPRES/ - The Expert-Grup Independent Analytical Centre, at a today’s news conference, launched a ranking of the most important economic events of 2019, as well as the most important challenges for 2020. The Expert-Grup also unveiled the evolution of the Early Warning Index – the index developed according to the Expert-Grup’s methodology, which shows the stabilization of the economic growth for 2019 and a slight slowing down next year.     

„The economic dynamic will fit within the model specific for the last years and in 2019, the increase of the Gross Domestic Product (GDP) will most likely not exceed five per cent. After the decline from 2015, the GDP’s growth was made uniform and varied between 4-5 per cent and a fluctuation close to the annual increase rate. Nevertheless, on the long term, a stabilization of the GDP’s increase potentially at about four per cent is recorded. This fact represents, rather, a signal of concern, in the context when the capital and the labour force – the factors which provide economic growth – witness weak developments. So that after the phase of stable evolution, a tempering of the effective GDP’s dynamic might follow and implicitly, of the potential GDP,” the executive director of the Expert-Grup Independent Analytical Centre, co-author of the publication Adrian Lupusor has said.     

The Early Warning Index, calculated by Expert-Grup quarterly, shows “some pretty timid signs of increase in the economic dynamic – a tendency which looks pretty uncertain against the background of the worrying tendencies as to the private investment activity, remittances and exports. Instead, the expansionist budgetary policy for the second year in a row is to foster the investment activity of the state; yet, with risks for the economic growth from the next years,” economists said.    

The ranking of the most important economic events from 2019, elaborated by experts, contains the adoption of the state budget for 2020, as well as a string of events which marked the financial and banking sector, such as the relaxation of the monetary policy, sale of the controlling stake of the Commercial Bank Moldindconbank, enhancement of the degree of residents’ indebtedness and regulation of the sector of micro-loans. The ranking is completed also by a string of findings dealing with the competitiveness of Moldova’s economy, in general, such as companies’ reticence for new investments, as well as the poor increase of exports.    

As for the top of the most important challenges for 2020, experts included the financing of the budget deficit planned for the next year, low capacity of implementation of public investments with foreign financing, Moldova’s supply with natural gas, ensuring the juridical and decision-taking independence of the National Bank of Moldova, investigation of frauds from the banking system, as well as the worrying developments of the labour markets.

For 2020, the national public budget’s deficit is planned at 3.3 per cent of the GDP, which shows doubts as to the next year’s electoral character. Experts emphasize the risks of the financing of this deficit, as the more active resorting to borrowing loans from commercial banks might undermine the crediting of the real sector, with negative impact on companies’ investments and incomes. Not in the least, an expansionist budgetary policy, along with a telexed monetary policy pose certain risks also for the macro-financial stability for 2020.   

Another subjects contained in the top of Expert-Grup brought for discussion the existence of a potential gas crisis in 2020. Experts note that the risk of a potential “gas crisis” is pretty low. “Nevertheless, the fact itself that alternative solutions to the traditional one (purchasing gas transited across Ukraine) will be implemented in 2020 implies risks, as the mechanisms have not been earlier tested and the preparations took place in alert regime,” experts added.