EBRD WORSENS FORECAST FOR MOLDOVAN ECONOMY FOR THIS YEAR AND 2021

The COVID-19 pandemic crisis has already told negatively on the Moldovan economy, and its negative impact may continue as the situation is uncertain, believe the EBRD experts, who presented their opinion in the Bank's autumn report on regional economic perspectives.

According to their calculations, Moldova's GDP is forecast to decline by 5.5 per cent in 2020 followed by growth of 3.5 per cent in 2021, but risks are weighed to the downside, reflecting the uncertain path of the pandemic in the coming months.

The experts are reminding that the COVID-19 crisis has had a major negative impact on the already decelerating economy. The GDP growth rate slowed to 0.9 per cent year-on-year in the first quarter of 2020, driven by a drop in exports and private consumption, although investments in fixed assets remained buoyant on the back of significant construction activity.

And in the second quarter, output contracted by 14 per cent year-on-year as all sectors of the economy posted large declines.

"The disruption of global supply chains in the early days of the pandemic hurt exports of automotive components, which are well integrated into global value chains. Domestic COVID-19 containment measures have stopped the activities of many services enterprises, while plummeting remittances in March and April hit household disposable incomes and consumer demand. Economic activity bottomed out in the second quarter of 2020. Since May, remittances have been recovering strongly and other short-term indicators point to a gradual resumption of domestic economic activity and exports, although they remain in negative territory in year-on-year terms", said the EBRD Report.