The budget deficit of the Transnistrian region in 2015 is projected to represent 40% of the public spending. In the publication “Transnistrian Economic Reality”, the think tank “Expert-Grup” says the enormous budget deficit is a constant problem in the region, while the deterioration of the economic situation only intensified this constraint, IPN reports.

The experts believe there is a kind of vicious circle as the chronic budget deficit affects the growth, while the economic difficulties, for their part, lead to a decline in public finances.

“Expert-Grup” considers that the heating system is the most vulnerable in the region because its functioning cannot be now ensured based on other fuels than natural gas. Investments of over US$100 million are needed to ensure the switchover to other energy products. But the necessary budget recourses haven’t been identified. Therefore, the residential complex remains exposed to major risks.

The economic decline in Russia and the recession in Ukraine have and will have unfavorable effects on the region. The deterioration of the economic climate in Russia and Ukraine highlighted the acute economic imbalances existing in the Transnistrian region. In order to ensure sustainable development in the region, broad economic restructuring is needed to improve the business climate. The Transnistrian authorities must stop opposing closer economic cooperation with the EU.