{"id":449315,"date":"2021-04-05T13:25:18","date_gmt":"2021-04-05T13:25:18","guid":{"rendered":"https:\/\/www.moldova.org\/en\/?p=449315"},"modified":"2021-06-18T10:38:55","modified_gmt":"2021-06-18T10:38:55","slug":"experts-long-term-crisis-effects-and-economic-forecasts","status":"publish","type":"post","link":"https:\/\/www.moldova.org\/en\/experts-long-term-crisis-effects-and-economic-forecasts\/","title":{"rendered":"Experts: Long-term crisis effects and economic forecasts"},"content":{"rendered":"<span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Reading Time: <\/span> <span class=\"rt-time\"> 4<\/span> <span class=\"rt-label rt-postfix\">minutes<\/span><\/span><p>The economy of the Republic of Moldova was heavily affected by the global and local crises in 2020. Experts from Moldova have analysed the most important circumstances, evaluated their repercussions and presented forecasts regarding the main economic indicators.<\/p>\n<p>First, in 2020, the exports decreased by <strong>$296 million<\/strong> or 11% compared to 2019, the analysis of economic expert <strong>Veaceslav Ionita <\/strong><a href=\"https:\/\/ionita.md\/2021\/03\/25\/seceta-si-criza-mondiala-din-2020-au-provocat-scaderea-exporturilor-moldovenesti-cu-11\/\">showed<\/a>. The largest contribution to the decline of Moldovan exports was due to agricultural products ($188 million), as well as automotive components ($96 million). Some products registered and increase in exports though, diminishing the overall drop: animal oils and fats ($33 million), vegetable and fruit ($10 million).<\/p>\n<div id=\"attachment_449317\" style=\"width: 1380px\" class=\"wp-caption aligncenter\"><img fetchpriority=\"high\" decoding=\"async\" aria-describedby=\"caption-attachment-449317\" class=\"wp-image-449317 size-full\" src=\"https:\/\/www.moldova.org\/en\/wp-content\/uploads\/sites\/2\/2021\/04\/exporturi.jpg\" alt=\"\" width=\"1370\" height=\"843\" srcset=\"https:\/\/www.moldova.org\/en\/wp-content\/uploads\/sites\/2\/2021\/04\/exporturi.jpg 1370w, https:\/\/www.moldova.org\/en\/wp-content\/uploads\/sites\/2\/2021\/04\/exporturi-300x185.jpg 300w, https:\/\/www.moldova.org\/en\/wp-content\/uploads\/sites\/2\/2021\/04\/exporturi-768x473.jpg 768w, https:\/\/www.moldova.org\/en\/wp-content\/uploads\/sites\/2\/2021\/04\/exporturi-1250x769.jpg 1250w, https:\/\/www.moldova.org\/en\/wp-content\/uploads\/sites\/2\/2021\/04\/exporturi-400x246.jpg 400w\" sizes=\"(max-width: 1370px) 100vw, 1370px\" \/><p id=\"caption-attachment-449317\" class=\"wp-caption-text\">Source: ionita.md<\/p><\/div>\n<p>Beside the global economic crisis caused by COVID-19, which hit the Moldovan economy as well, the country was affected by a severe drought in 2020. That lead to the <span style=\"color: #993300;\">largest decline in agricultural production in at least 50 years<\/span>, Veaceslav Ionita <a href=\"https:\/\/ionita.md\/2021\/03\/25\/seceta-si-criza-mondiala-din-2020-au-provocat-scaderea-exporturilor-moldovenesti-cu-11\/\">said<\/a>. As a consequence, the exports were also massively affected. Visit this site for other <a href=\"https:\/\/www.spacrun.com\/\">SPAC Investing Analytics<\/a>.<\/p>\n<p>According to the <strong>National Bureau of Statistics (NBS)<\/strong> <a href=\"https:\/\/statistica.gov.md\/newsview.php?l=ro&amp;idc=168&amp;id=6897\">data<\/a>, the global agricultural production registered a decrease of<strong> 27%<\/strong> in 2020, as compared to the previous year. The previous anti-record was set in 1994, when agricultural production fell by 25%.<\/p>\n<div id=\"attachment_449316\" style=\"width: 1155px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" aria-describedby=\"caption-attachment-449316\" class=\"wp-image-449316 size-full\" src=\"https:\/\/www.moldova.org\/en\/wp-content\/uploads\/sites\/2\/2021\/04\/agricultura.jpg\" alt=\"\" width=\"1145\" height=\"492\" srcset=\"https:\/\/www.moldova.org\/en\/wp-content\/uploads\/sites\/2\/2021\/04\/agricultura.jpg 1145w, https:\/\/www.moldova.org\/en\/wp-content\/uploads\/sites\/2\/2021\/04\/agricultura-300x129.jpg 300w, https:\/\/www.moldova.org\/en\/wp-content\/uploads\/sites\/2\/2021\/04\/agricultura-768x330.jpg 768w, https:\/\/www.moldova.org\/en\/wp-content\/uploads\/sites\/2\/2021\/04\/agricultura-400x172.jpg 400w\" sizes=\"(max-width: 1145px) 100vw, 1145px\" \/><p id=\"caption-attachment-449316\" class=\"wp-caption-text\">Source: ionita.md<\/p><\/div>\n<p>One of the strategic industries of the national economy &#8211; the wine industry was affected as well. In 2020, there was <span style=\"color: #993300;\">the lowest grape harvest and the lowest yield in the last 10 years<\/span>. The grape harvest decreased by <strong>39.2%<\/strong> and the quantity of wine produced by <strong>42.2%<\/strong> compared to 2019, as the <a href=\"http:\/\/www.wineofmoldova.com\/sectorul-vitivinicol-din-republica-moldova-isi-mentine-potentialul-competitiv-pentru-dezvoltarea-ulterioara\/\">figures<\/a> of the <strong>National Vine and Wine Office<\/strong> presented. The biggest decline was recorded for the bulk export of wine &#8211; a decrease of 20.4% in volume and 24% in value, whereas the export of bottled wine actually increased.<\/p>\n<blockquote><p>All in all, the pandemic crisis and the drought caused a drop of GDP for 2020 of about 6.5%.<\/p><\/blockquote>\n<p>A <a href=\"https:\/\/www.expert-grup.org\/media\/k2\/attachments\/MEGA_22_prezentarea.pdf\">publication<\/a> of the <strong>Independent Analytical Center Expert-Grup<\/strong> revealed the main causes that have exacerbated the economic recession in the Republic of Moldova &#8211; low competitiveness of the private sector and lack of vision and capacity of politicians to intervene effectively in order to combat the economic and social effects of the crisis. A survey conducted by the <strong>World Bank<\/strong> and <a href=\"https:\/\/www.expert-grup.org\/ro\/activitate\/item\/2117-suportul-oferit-de-stat-firmelor-din-republica-moldova-in-perioada-crizei-pandemice-este-cel-mai-mic-din-regiune\/2117-suportul-oferit-de-stat-firmelor-din-republica-moldova-in-perioada-crizei-pandemice-este-cel-mai-mic-din-regiune?category=188\">cited<\/a> by Expert-Grup stated that only<span style=\"color: #993300;\"><strong> 5.9%<\/strong><\/span> of economic agents in the Republic of Moldova said they received (or expect to receive) support from state authorities during the coronavirus crisis. That is while about 79.8% of companies benefited from state support in Poland, 51.4% in Georgia and 48.5% in Romania, for example.<\/p>\n<p><em>&#8220;Only 2% of enterprises with up to 20 employees mentioned that they received aid, while in the case of medium and large enterprises this rate was 10-15%,&#8221;<\/em> informed <strong>Stas Madan<\/strong>, economist at Expert-Grup. What&#8217;s more, 22% of the companies&#8217; representatives claimed that they did not qualify for government support, and <span style=\"color: #993300;\">31% of business representatives said they did not even know about the fact that the state offers certain assistance opportunities.<\/span> Therefore, the economist also emphasised the lack of effective communication between state authorities and businesses from Moldova.<\/p>\n<h3>2021 economic forecasts<\/h3>\n<p>A relatively high economic growth is forecasted for 2021 &#8211; <strong>5.4%<\/strong>, as a result of an increase of Gross Value Added in agriculture (14.5%) and a growth in exports (10%) stimulated by the potential economic boost in the region, the Expert-Grup publication <a href=\"https:\/\/www.expert-grup.org\/media\/k2\/attachments\/MEGA_22_prezentarea.pdf\">stated<\/a>. \u00a0&#8220;<em>The relaunch in the agriculture sector and the expected economic relaunch in the region will be the main engines for the economic growth in 2021. Also, there is the effect of the low comparison base, which could create conditions for an economic growth of 5-6%. The downside is that the economy will increase in the context of an investment activity compression, both in the public and private sectors. Although the economy will grow, we can\u2019t expect also an employment increase. The GDP will be driven by the final consumption, which will increase by 8.3%, and the growth of exports, that will be faster than that of imports,&#8221; <\/em>Executive Director of Expert-Grup, <strong>Adrian Lupusor<\/strong>, <a href=\"https:\/\/www.expert-grup.org\/en\/activitate\/comunicate-de-presa\/item\/2116-principalele-prognoze-economice-pentru-2021-an-care-va-fi-marcat-de-continuarea-pandemiei-si-instabilitate-politica\/2116-principalele-prognoze-economice-pentru-2021-an-care-va-fi-marcat-de-continuarea-pandemiei-si-instabilitate-politica?category=188\">explained<\/a>.<\/p>\n<p>The main challenges for 2021, on the other hand, are related to public finances administration, in the context of economic and political uncertainty existing in Moldova. Another public budget deficit is forecasted to occur in 2021 (<strong>6.8% of GDP<\/strong>), as a consequence of faster public spending when compared to the expected revenue.<\/p>\n<p>2021 will be especially difficult for the sectors that have been already affected the most by the pandemic crisis, namely hospitality and tourism, small traders and transport services. <em>&#8220;Most businesses expect a return to optimal sales in the second half of 2021,&#8221;<\/em> the Expert-Grup forecasts mentioned.<\/p>\n<p>At the same time, exports are about to grow by 9.6%, while imports will register an annual increase of 6.8%.<\/p>\n<p>When it comes to individuals, a slight income growth is expected &#8211; 1.7% for wages and 3.3% for pensions, along with an increase of final consumption (8.3%), an increase of consumer loans or real estate loans that might exceed 15%, as well as an upward trend in prices (annual inflation rate of 2.6%).<em> &#8220;The greatest risk for the National Bank, the financial sector and in general for the economic security of the state, is represented by the irresponsible actions of politicians,&#8221;<\/em> the Expert-Grup representatives concluded.<\/p>\n<p>Photo: Nicholas Cappello| Unsplash<\/p>\n","protected":false},"excerpt":{"rendered":"<p><span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Reading Time: <\/span> <span class=\"rt-time\"> 4<\/span> <span class=\"rt-label rt-postfix\">minutes<\/span><\/span>The economy of the Republic of Moldova was heavily affected by the global and local crises in 2020. Experts from Moldova have analysed the most important circumstances, evaluated their repercussions and presented forecasts regarding the main economic indicators. First, in 2020, the exports decreased by $296 million or 11% compared to 2019, the analysis of [&hellip;]<\/p>\n","protected":false},"author":31,"featured_media":449318,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5,4,56],"tags":[1023,381,77,985,90,494,525,35,27,608],"class_list":["post-449315","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","category-society","category-reportaje","tag-1023","tag-crisis","tag-economy","tag-effects","tag-experts","tag-figures","tag-forecasts","tag-important","tag-moldova","tag-pandemic"],"content_social_share":"<span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Reading Time: <\/span> <span class=\"rt-time\"> 4<\/span> <span class=\"rt-label rt-postfix\">minutes<\/span><\/span><p>The economy of the Republic of Moldova was heavily affected by the global and local crises in 2020. Experts from Moldova have analysed the most important circumstances, evaluated their repercussions and presented forecasts regarding the main economic indicators.<\/p>\n<p>First, in 2020, the exports decreased by <strong>$296 million<\/strong> or 11% compared to 2019, the analysis of economic expert <strong>Veaceslav Ionita <\/strong><a href=\"https:\/\/ionita.md\/2021\/03\/25\/seceta-si-criza-mondiala-din-2020-au-provocat-scaderea-exporturilor-moldovenesti-cu-11\/\">showed<\/a>. The largest contribution to the decline of Moldovan exports was due to agricultural products ($188 million), as well as automotive components ($96 million). Some products registered and increase in exports though, diminishing the overall drop: animal oils and fats ($33 million), vegetable and fruit ($10 million).<\/p>\n<div id=\"attachment_449317\" style=\"width: 1380px\" class=\"wp-caption aligncenter\"><img fetchpriority=\"high\" decoding=\"async\" aria-describedby=\"caption-attachment-449317\" class=\"wp-image-449317 size-full\" src=\"https:\/\/www.moldova.org\/en\/wp-content\/uploads\/sites\/2\/2021\/04\/exporturi.jpg\" alt=\"\" width=\"1370\" height=\"843\" srcset=\"https:\/\/www.moldova.org\/en\/wp-content\/uploads\/sites\/2\/2021\/04\/exporturi.jpg 1370w, https:\/\/www.moldova.org\/en\/wp-content\/uploads\/sites\/2\/2021\/04\/exporturi-300x185.jpg 300w, https:\/\/www.moldova.org\/en\/wp-content\/uploads\/sites\/2\/2021\/04\/exporturi-768x473.jpg 768w, https:\/\/www.moldova.org\/en\/wp-content\/uploads\/sites\/2\/2021\/04\/exporturi-1250x769.jpg 1250w, https:\/\/www.moldova.org\/en\/wp-content\/uploads\/sites\/2\/2021\/04\/exporturi-400x246.jpg 400w\" sizes=\"(max-width: 1370px) 100vw, 1370px\" \/><p id=\"caption-attachment-449317\" class=\"wp-caption-text\">Source: ionita.md<\/p><\/div>\n<p>Beside the global economic crisis caused by COVID-19, which hit the Moldovan economy as well, the country was affected by a severe drought in 2020. That lead to the <span style=\"color: #993300;\">largest decline in agricultural production in at least 50 years<\/span>, Veaceslav Ionita <a href=\"https:\/\/ionita.md\/2021\/03\/25\/seceta-si-criza-mondiala-din-2020-au-provocat-scaderea-exporturilor-moldovenesti-cu-11\/\">said<\/a>. As a consequence, the exports were also massively affected. Visit this site for other <a href=\"https:\/\/www.spacrun.com\/\">SPAC Investing Analytics<\/a>.<\/p>\n<p>According to the <strong>National Bureau of Statistics (NBS)<\/strong> <a href=\"https:\/\/statistica.gov.md\/newsview.php?l=ro&amp;idc=168&amp;id=6897\">data<\/a>, the global agricultural production registered a decrease of<strong> 27%<\/strong> in 2020, as compared to the previous year. The previous anti-record was set in 1994, when agricultural production fell by 25%.<\/p>\n<div id=\"attachment_449316\" style=\"width: 1155px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" aria-describedby=\"caption-attachment-449316\" class=\"wp-image-449316 size-full\" src=\"https:\/\/www.moldova.org\/en\/wp-content\/uploads\/sites\/2\/2021\/04\/agricultura.jpg\" alt=\"\" width=\"1145\" height=\"492\" srcset=\"https:\/\/www.moldova.org\/en\/wp-content\/uploads\/sites\/2\/2021\/04\/agricultura.jpg 1145w, https:\/\/www.moldova.org\/en\/wp-content\/uploads\/sites\/2\/2021\/04\/agricultura-300x129.jpg 300w, https:\/\/www.moldova.org\/en\/wp-content\/uploads\/sites\/2\/2021\/04\/agricultura-768x330.jpg 768w, https:\/\/www.moldova.org\/en\/wp-content\/uploads\/sites\/2\/2021\/04\/agricultura-400x172.jpg 400w\" sizes=\"(max-width: 1145px) 100vw, 1145px\" \/><p id=\"caption-attachment-449316\" class=\"wp-caption-text\">Source: ionita.md<\/p><\/div>\n<p>One of the strategic industries of the national economy &#8211; the wine industry was affected as well. In 2020, there was <span style=\"color: #993300;\">the lowest grape harvest and the lowest yield in the last 10 years<\/span>. The grape harvest decreased by <strong>39.2%<\/strong> and the quantity of wine produced by <strong>42.2%<\/strong> compared to 2019, as the <a href=\"http:\/\/www.wineofmoldova.com\/sectorul-vitivinicol-din-republica-moldova-isi-mentine-potentialul-competitiv-pentru-dezvoltarea-ulterioara\/\">figures<\/a> of the <strong>National Vine and Wine Office<\/strong> presented. The biggest decline was recorded for the bulk export of wine &#8211; a decrease of 20.4% in volume and 24% in value, whereas the export of bottled wine actually increased.<\/p>\n<blockquote><p>All in all, the pandemic crisis and the drought caused a drop of GDP for 2020 of about 6.5%.<\/p><\/blockquote>\n<p>A <a href=\"https:\/\/www.expert-grup.org\/media\/k2\/attachments\/MEGA_22_prezentarea.pdf\">publication<\/a> of the <strong>Independent Analytical Center Expert-Grup<\/strong> revealed the main causes that have exacerbated the economic recession in the Republic of Moldova &#8211; low competitiveness of the private sector and lack of vision and capacity of politicians to intervene effectively in order to combat the economic and social effects of the crisis. A survey conducted by the <strong>World Bank<\/strong> and <a href=\"https:\/\/www.expert-grup.org\/ro\/activitate\/item\/2117-suportul-oferit-de-stat-firmelor-din-republica-moldova-in-perioada-crizei-pandemice-este-cel-mai-mic-din-regiune\/2117-suportul-oferit-de-stat-firmelor-din-republica-moldova-in-perioada-crizei-pandemice-este-cel-mai-mic-din-regiune?category=188\">cited<\/a> by Expert-Grup stated that only<span style=\"color: #993300;\"><strong> 5.9%<\/strong><\/span> of economic agents in the Republic of Moldova said they received (or expect to receive) support from state authorities during the coronavirus crisis. That is while about 79.8% of companies benefited from state support in Poland, 51.4% in Georgia and 48.5% in Romania, for example.<\/p>\n<p><em>&#8220;Only 2% of enterprises with up to 20 employees mentioned that they received aid, while in the case of medium and large enterprises this rate was 10-15%,&#8221;<\/em> informed <strong>Stas Madan<\/strong>, economist at Expert-Grup. What&#8217;s more, 22% of the companies&#8217; representatives claimed that they did not qualify for government support, and <span style=\"color: #993300;\">31% of business representatives said they did not even know about the fact that the state offers certain assistance opportunities.<\/span> Therefore, the economist also emphasised the lack of effective communication between state authorities and businesses from Moldova.<\/p>\n<h3>2021 economic forecasts<\/h3>\n<p>A relatively high economic growth is forecasted for 2021 &#8211; <strong>5.4%<\/strong>, as a result of an increase of Gross Value Added in agriculture (14.5%) and a growth in exports (10%) stimulated by the potential economic boost in the region, the Expert-Grup publication <a href=\"https:\/\/www.expert-grup.org\/media\/k2\/attachments\/MEGA_22_prezentarea.pdf\">stated<\/a>. \u00a0&#8220;<em>The relaunch in the agriculture sector and the expected economic relaunch in the region will be the main engines for the economic growth in 2021. Also, there is the effect of the low comparison base, which could create conditions for an economic growth of 5-6%. The downside is that the economy will increase in the context of an investment activity compression, both in the public and private sectors. Although the economy will grow, we can\u2019t expect also an employment increase. The GDP will be driven by the final consumption, which will increase by 8.3%, and the growth of exports, that will be faster than that of imports,&#8221; <\/em>Executive Director of Expert-Grup, <strong>Adrian Lupusor<\/strong>, <a href=\"https:\/\/www.expert-grup.org\/en\/activitate\/comunicate-de-presa\/item\/2116-principalele-prognoze-economice-pentru-2021-an-care-va-fi-marcat-de-continuarea-pandemiei-si-instabilitate-politica\/2116-principalele-prognoze-economice-pentru-2021-an-care-va-fi-marcat-de-continuarea-pandemiei-si-instabilitate-politica?category=188\">explained<\/a>.<\/p>\n<p>The main challenges for 2021, on the other hand, are related to public finances administration, in the context of economic and political uncertainty existing in Moldova. Another public budget deficit is forecasted to occur in 2021 (<strong>6.8% of GDP<\/strong>), as a consequence of faster public spending when compared to the expected revenue.<\/p>\n<p>2021 will be especially difficult for the sectors that have been already affected the most by the pandemic crisis, namely hospitality and tourism, small traders and transport services. <em>&#8220;Most businesses expect a return to optimal sales in the second half of 2021,&#8221;<\/em> the Expert-Grup forecasts mentioned.<\/p>\n<p>At the same time, exports are about to grow by 9.6%, while imports will register an annual increase of 6.8%.<\/p>\n<p>When it comes to individuals, a slight income growth is expected &#8211; 1.7% for wages and 3.3% for pensions, along with an increase of final consumption (8.3%), an increase of consumer loans or real estate loans that might exceed 15%, as well as an upward trend in prices (annual inflation rate of 2.6%).<em> &#8220;The greatest risk for the National Bank, the financial sector and in general for the economic security of the state, is represented by the irresponsible actions of politicians,&#8221;<\/em> the Expert-Grup representatives concluded.<\/p>\n<p>Photo: Nicholas Cappello| Unsplash<\/p>\n<div class='heateorSssClear'><\/div><div  class='heateor_sss_sharing_container heateor_sss_horizontal_sharing' data-heateor-sss-href='https:\/\/www.moldova.org\/en\/experts-long-term-crisis-effects-and-economic-forecasts\/' data-heateor-sss-no-counts=\"1\"><div class='heateor_sss_sharing_title' style=\"font-weight:bold\" ><\/div><div class=\"heateor_sss_sharing_ul\"><a aria-label=\"Facebook\" class=\"heateor_sss_facebook\" href=\"https:\/\/www.facebook.com\/sharer\/sharer.php?u=https%3A%2F%2Fwww.moldova.org%2Fen%2Fexperts-long-term-crisis-effects-and-economic-forecasts%2F\" title=\"Facebook\" rel=\"nofollow noopener\" target=\"_blank\" style=\"font-size:32px!important;box-shadow:none;display:inline-block;vertical-align:middle\"><span 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