Economics

MoE CHANGES ITS ECONOMIC FORECASTS FOR A THIRD TIME SINCE YEAR BEGINNING

26 november, 2020

The Moldovan Ministry of Economy and Infrastructure has published its new forecast of macro-economic indicators for 2021-2023, having substantially changed it compared with the previous forecast made last July.

In the document, prepared with the participation of IMF experts, Moldova’s GDP is expected to fall this year by 6.5%, not by 4.5% as was projected four months ago. However, already in 2021 the national economy is expected to grow up by 4.7% (+0.6%), in 2022 – by 4%, and in 2023 – by 4.2%, as it was planned in July.

The forecast of the average annual inflation rate in 2020 has been increased from 2.8% up to 3.7%. By the end of the current year, the index of consumer prices is expected at 0.4% (-0.1%), in 2021 – 4% (-2%), and in subsequent two years the figures have remained unchanged – by 5% each.

The industrial production decline in 2020 will be 4% (-1%), and next 3 years the industry will be growing – by 2.4% (-2.8%), by 4.2% (+0.2%), and by 3.7% (-0.8%).

In agriculture, MoE experts are expecting a much worse situation this year – a fall by 27% against the year 2019. But already in 2021, the experts are forecasting a 24% growth of agricultural production.

Among domestic risks that may influence on a forecast change the Ministry of Economy is indicating a possible resumption of restrictions due to pandemic situation deterioration in the country, unfavorable weather conditions, a political instability, a growing imbalance on the macro-economic level, and possible fluctuations of the national leu currency.

Among external risks – a possible new pandemic crisis world-wide, a growth of oil product prices, a geopolitical tension, new trade barriers.

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