World Bank significantly improves forecast of Moldova's economic growth in 2018

Chisinau, 1 November /MOLDPRES/ - Moldova’s economy will grow by 4.8 per cent in 2018, exclusively due to a big domestic demand, stimulated by a real increase in salaries, especially in the budgetary sector and improvement of remittances. Statements to this effect were made at a news conference held at the Chisinau-based World Bank’s (WB) Office today.    

”In the basic scenario, we are much more optimistic than we have usually been,” a World Bank, Marcel Chistruga, has said. The World Bank improved the forecast of growth of the Moldovan economy to 4.8 per cent from 3.8 per cent, as it anticipated in last May. The paces of economic growth will be more moderate in the next years; the WB expects a 3.5-per cent increase of the economy till 2020.      

”With this structure of the economy, when the economic growth comes from the part of consumption, it is very important to have deep structural reforms, which might change the economic paradigm, which would create conditions for a sustainable increase of the productivity,” Chistruga noted.    

According to the WB expert, the improvement of the situation in the financial sector will further back private investments, as well as the accumulation of stocks. “This will inevitably lead to an increase in imports, so that, in continuation, the contribution of net exports will remain negative. The parliamentary polls due in 2019 will trigger an expansion of short-term public spending and in the medium term, we believe that the bigger confidence of consumers and the business environment, as well as continuous normalization in the financial sector will be practically the engines of the economic growth,” Marcel Chistruga added.      

The World Bank considers that the fiscal deficit for 2018 will remain under forecast level of 2.5 per cent of the Gross Domestic Product (GDP). Moldova has a budget surplus in the first nine months of this year, due to big incomes. The current account deficit “will remain under the historical average sizes.”   

The disinflation tendencies, triggered by the appreciation of the Moldovan leu and lower import prices, “will remain valid till late 2019.” Yet, in the medium term, WB said that “the inflation will increase progressively and this will happen against a background of a higher demand, as well as of expected increases in the regulated prices, especially in the second half of the next year.”   

The World Bank forecasts a significant decrease in the poverty rate, by 3 percentage points in 2018, to 12 per cent, and a level lower than 10 per cent in 2020. 

(Reporter V. Bercu, editor M. Jantovan)