{"id":436408,"date":"2015-10-13T00:21:16","date_gmt":"2015-10-12T21:21:16","guid":{"rendered":"http:\/\/www.moldova.org\/?p=436408"},"modified":"2015-10-13T00:21:16","modified_gmt":"2015-10-12T21:21:16","slug":"world-bank-forecast-moldova-in-recession-fiscal-and-monetary-instability-by-the-end-of-2015","status":"publish","type":"post","link":"https:\/\/www.moldova.org\/en\/world-bank-forecast-moldova-in-recession-fiscal-and-monetary-instability-by-the-end-of-2015\/","title":{"rendered":"World Bank forecast: Moldova in recession, fiscal and monetary instability by the end of 2015"},"content":{"rendered":"Reading Time: <\/span> 2<\/span> minutes<\/span><\/span>

The World Bank published<\/a> on Monday, October 12, the report regarding the economic prospective of the Republic of Moldova in the next 6 months and the next year.
\nThe report presented three main ideas about the economic situation of Moldova at the moment:
\n1. Redirecting of the exports from East to West led to an unexpected growth, but the second half of 2015 will be dominated by recession, caused by poor harvest and the negative balance of the monetary demand and offer. <\/strong>
\nThe economic growth went from 4,6% in 2014 to 3,6% in the first half of 2015, only because of the low demand from Eastern partners. The exports to Russia were cut by half. At the same time, the rate of consumption almost stopped and the little fixed investment was compensated by the stocks.
\n2.\u00a0The problems of the banking system would led to fiscal costs and macroeconomic instability.<\/strong><\/p>\n

The inflation caused by the overwhelming quantity of Leu, and the low value, respectively, went up to 12,6% in September 2015. Moreover, National Bank increased the interest rates up to 19,5%, making the loans even more inaccessible.<\/p>\n

Beside this, the Government has to face fiscal pressures due to the cut of the external assistance, increased costs of loans, low customs incomes. Thus, the public deficit is equal to 1,5% from the GDP, while the external debt went up to 90% from GDP.<\/p>\n

3. 2016 will be a year of slow growth, with major macroeconomic risks and \u00a0a lot of critical structural reforms to be implemented.<\/b><\/p>\n

After 2% recession in the second half of 2015, there will be a slow and moderate growth (0,5%) of the Moldovan economy. The limited rate of consumption, rising tariffs and high prices for credits will maintain the inflation at high levels. \u00a0It will be important to establish a flexible rate for the national currency, in order to resist the external shocks.<\/p>\n

Furthermore, unexpected slower economic growth of some economic partners and lack of improvement in the business environment will have an even more negative impact on the economy of Moldova, and specifically, will cause the poverty growth.<\/p>\n

There is a critical need for structural reforms in order to support the macro-fiscal stability, to increase the competitivity of the economy and to stimulating the generation of new jobs. One of the most appropriate solution is the improvement of the efficiency of public expenditures. A special approach should be addressed towards the agriculture, which will continue to have a good perspective of growth, if public services and fiscal\u00a0spending\u00a0is visibly improved.\u00a0<\/strong><\/p>\n

The World Bank report is a good sign for the Moldovan Government, which lost people’s trust because of lack of reforms, transparency and severe thefts from the public domain.<\/p>\n","protected":false},"excerpt":{"rendered":"

Reading Time: <\/span> 2<\/span> minutes<\/span><\/span>The World Bank published on Monday, October 12, the report regarding the economic prospective of the Republic of Moldova in the next 6 months and the next year. The report presented three main ideas about the economic situation of Moldova at the moment: 1. Redirecting of the exports from East to West led to an […]<\/p>\n","protected":false},"author":6,"featured_media":261116,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-436408","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy"],"content_social_share":"Reading Time: <\/span> 2<\/span> minutes<\/span><\/span>

The World Bank published<\/a> on Monday, October 12, the report regarding the economic prospective of the Republic of Moldova in the next 6 months and the next year.
\nThe report presented three main ideas about the economic situation of Moldova at the moment:
\n1. Redirecting of the exports from East to West led to an unexpected growth, but the second half of 2015 will be dominated by recession, caused by poor harvest and the negative balance of the monetary demand and offer. <\/strong>
\nThe economic growth went from 4,6% in 2014 to 3,6% in the first half of 2015, only because of the low demand from Eastern partners. The exports to Russia were cut by half. At the same time, the rate of consumption almost stopped and the little fixed investment was compensated by the stocks.
\n2.\u00a0The problems of the banking system would led to fiscal costs and macroeconomic instability.<\/strong><\/p>\n

The inflation caused by the overwhelming quantity of Leu, and the low value, respectively, went up to 12,6% in September 2015. Moreover, National Bank increased the interest rates up to 19,5%, making the loans even more inaccessible.<\/p>\n

Beside this, the Government has to face fiscal pressures due to the cut of the external assistance, increased costs of loans, low customs incomes. Thus, the public deficit is equal to 1,5% from the GDP, while the external debt went up to 90% from GDP.<\/p>\n

3. 2016 will be a year of slow growth, with major macroeconomic risks and \u00a0a lot of critical structural reforms to be implemented.<\/b><\/p>\n

After 2% recession in the second half of 2015, there will be a slow and moderate growth (0,5%) of the Moldovan economy. The limited rate of consumption, rising tariffs and high prices for credits will maintain the inflation at high levels. \u00a0It will be important to establish a flexible rate for the national currency, in order to resist the external shocks.<\/p>\n

Furthermore, unexpected slower economic growth of some economic partners and lack of improvement in the business environment will have an even more negative impact on the economy of Moldova, and specifically, will cause the poverty growth.<\/p>\n

There is a critical need for structural reforms in order to support the macro-fiscal stability, to increase the competitivity of the economy and to stimulating the generation of new jobs. One of the most appropriate solution is the improvement of the efficiency of public expenditures. A special approach should be addressed towards the agriculture, which will continue to have a good perspective of growth, if public services and fiscal\u00a0spending\u00a0is visibly improved.\u00a0<\/strong><\/p>\n

The World Bank report is a good sign for the Moldovan Government, which lost people’s trust because of lack of reforms, transparency and severe thefts from the public domain.<\/p>\n

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