​WB LOWERS FORECAST OF MOLDOVAN GDP GROWTH TO 3.6% IN 2019

The World Bank forecasts that the Moldovan economy will grow 3.6% in 2019, says the “Financial Inclusion in Europe and Central Asia” report, published by the bank. These figures are lower than the previous forecast (3.8%).

Also, in comparison to the January report “Global Economic Prospects”, the growth of the Moldovan economy in 2020 was left unchanged – 3.5%, while in 2021 – was raised to 3.8% from 3.2%.

According to WB experts, economic growth will be positively influenced by measures in the field of fiscal policy, the salary raising, the state transfers and the lowering of interest rates.

Among the main problems for long-term sustainable growth of the Moldovan economy, they point at unfavorable demographic trends in the republic, low productivity and vulnerability to external shocks.

“Expansionist fiscal policy, introduced before elections in combination with a more dynamic regulated agricultural price will create inflation pressure, pushing the inflation out from the target corridor in the second half of 2019. Nevertheless, according to forecasts, the monetary position will remain adequate in a short-term perspective, and it is supposed that the consumption inflation will be held in the target corridor”, the WB says.

It is forecasted that the inflation will accelerate to 4.7% in 2019 from 3.8% in 2018. For the next year the WB is expecting it at 4.5%, while in 2021 – 5%.

In 2018, the Moldovan GDP accounted for 190 billion lei, growing 4% against 2017. The Moldovan Government hopes for a similar growth in 2019, and 3.8% in the following two years.

As for the inflation, it is expected within 4.9% and respectively 5% in each of the following years.