ECO-BUS WEEKLY DIGEST October, 19-25. Most important Economy & Business news by IPN
● MONDAY, October, 19
Farmers take to the streets
The farmers from nine districts are mounting a protest. They parked their agricultural machines by the roadside in protest at the fact that the demands they submitted to the authorities were ignored. Andrei Dînga, a framer from Ștefan Vodă, has told IPN that the farmers represent the districts of Ștefan Vodă, Căușeni, Hâncești, Leova, Rezina, Ialoveni, Ungheni, Basarabeasca, and Telenești. Only a part of the machines were taken to the roadside. The others are in the fields. The producers want this way to transmit the rulers a signal – not to forget and not to neglect the problems of farmers. According to Andrei Dînga, the authorities didn’t satisfy all the demands that they formulated in summer, concerning the first group grain crops. The situation is even more difficult in the case of the second group grain crops. A new agricultural year is to start and the producers have to cultivate the land and to sow it. “Farming cannot be put off until the authorities identify financial resources to offer the famers support,” stated Andrei Dînga.
● TUESDAY, October, 20
Young people can travel on “Road of Money” from age of 16
The young people starting with the age of 16, who want to integrate into the modern world of the financial system, can take part in an event entitled “Road of Money” that is staged by the National Bank of Moldova (NBM) in partnership with the Independent Think Tank “Expert-Grup” during October 29-30, in connection with the World Savings Day. In a press release, the NBM says that this year the participants will make a virtual trip during which they will learn many things about the “road of money” to real economy, cashless payment instruments and curiosities about their use in the Republic of Moldova and abroad. They will also find out how the money is put into circulation and what safety elements the national currency has. The young people, together with the organizers of the event, will reflect on the national financial system and will discuss the saving and loan instruments. The participants will be able to recapitulate their knowledge as the sessions that will be held during the two days will end with an assessment contest and the winners will be awarded sets of coins.
● THURSDAY, October, 22
A number of measures to control COVID-19 extended
A series of measures applied to prevent and control the spread of COVID-19 were extended until November 30. A draft decision to this effect was approved in the October 21 meeting of the Cabinet. This way, all the salary rights of the employees of health facilities treating patients with COVID-19 and the right to a monthly bonus to the salary for work provided in conditions of increased risk for health, equal to a basic salary at most, of the personnel of the National Public Health Agency, the medical institutions managed by the Ministry of Home Affairs, the Ministry of Defense, the National Administration of Penitentiaries and the Security and Intelligence Service are maintained.
Apple harvest smaller than last year
The apple harvest this year is of 530,000 tonnes, as opposed to 595,000 tonnes in 2019. Productivity declined by 0.12 tonnes per hectare even if the fruit-bearing area grew by 1,200 hectares. Specialists of the Ministry of Agriculture, Regional Development and Environment said the apple harvest is smaller owing to this year’s severe drought and to the hail that affected parts of the country. Contacted by IPN for details, Vasile Șarban, head of the Ministry’s Production and Processing Policy Division, said that the apple harvest was lower earlier. In 2010, there were gathered 207,000 tonnes of apples, but the area of orchards was then smaller. The harvest was also modest in 2007 when there was a drought – 218,190 tonnes. The smallest harvest during the last decades was in 2006 – 202,800 tonnes. Global productivity was then only 3.14 tonnes per hectare. Those orchards were inherited from the Soviet period. This year’s harvest can satisfy internal demand and sufficient quantities remain for export.
Criminal case on “privileged business” of National Lottery of Moldova
The Prosecutor General’s Office instituted criminal proceedings over abuse of power committed by decision makers of the Ministry of Economy and Infrastructure and the Public Property Agency in personal interests or the interest of third parties in the assignment of the gaming sector to foreign companies according to dubious schemes, which caused damage to the national public budget, IPN quoted Prosecutor General Alexandr Stoianoglo as saying in a press briefing. “The Ministry of Economy and Infrastructure arranged the technical conditions for the potential partners so as to exclude from the start the national companies from this sector. Evidently, all the conditions were adjusted for a concrete company, the contest results being predictable. The Prosecutor General’s Office investigated the actions that allowed causing damage to the public budget following the transfer of control in the gaming sector to foreign companies by different dubious schemes,” said the prosecutor.
Supply and demand on currency market in September
The Moldovan leu in September deprecated by 0.1% on average against the U.S. dollar to 16.6735 USD/MDL, as against 16.6511 USD/MDL in August. According to the values at end-September, the leu depreciated by 2% against U.S. dollar. The National Bank of Moldova said the degree of covering the net demand of currency from business entities by the net supply of currency of private individuals in September was of 102.4%, in contrast to 113.7% in August. Against the previous month, the net supply of currency of private individuals in September grew by US$27.4 million (+11.8%), while the net demand of currency from business entities by US$49.5 million (+24.2%). The central bank intervened by making net purchases of currency in the amount of US$29.6 million on the local interbank market. The euro continued to account for the largest part of the net supply of currency of private individuals – 83.6%.
● FRIDAY, October, 23
Economists’ forecast for 2021: Recession, decline in GDP and smaller incomes
The drought and the COVID-19 pandemic will lead to lower investments, significant economic recession and decline in the Gross Domestic Product and salaries in 2021. Some of the companies, especially those operating in the hospitality industry, can become insolvent, said economic expert Adrian Lupușor. “The economy of the Republic of Moldova does not go through the best period. We anticipate that the pandemic, in parallel with the drought, will generate an economic recession that will be much more serious than in 2009. We speak about a substantial economic impact. The Gross Domestic Product, according to the main scenario, which is rather conservative, could decline by 7.5,” IPN quoted the representative of the think tank “Expert-Grup” as saying in the talk show “Natalia Morari’s Politics” on TV8 channel. According to the expert, the future recession will hit the persons with low incomes, the lower-middle class that consists of persons who live on social benefits. Their situation will remain as bad. The COVID-19 pandemic and the drought affected the incomes of employees with low salaries, who work in the informal sector, agriculture, building and transport sectors.
Quality of loan portfolio worsened insignificantly in first half, NBM
Eleven banks licensed by the National Bank of Moldova (NBM) worked in Moldova on June 30, 2020. The first half witnessed a rise in the own funds and in assets, in the credit portfolio and deposits of private individuals and legal entities. The banking sector had a high level of liquidity. The quality of the loan portfolio worsened insignificantly in the first half, while the profit made in the first six months of this year decreased compared with the corresponding period last year, shows a NBM report that is quoted by IPN. The total assets were 94.7 billion lei, up 4.6% (4.1bn lei) on the first half of 2019. The gross loan balance was 43.9% of the total assets or 41.5 billion lei, up 2.8% (1.1bn lei). The volume of new loans released in the first half of this year was by 4.9% higher than in the corresponding period last year. The volume of loans provided to the energy industry sector, for purchasing or building homes increased the most – by 57.8% (314.4m lei) and 9.15% (570.9m lei) respectively.
Flights from Mărculești Airport put off
The plans related to the renovation of the Mărculești Airport, where international flights were to be operated since this summer, were thwarted by the pandemic, said President Igor Dodon, who runs for a new term in office. Asked by IPN about the promises related to the renovation of the airport made last yearend, Igor Dodon said the necessary project was prepared. The investment volume was set at several tens of millions of lei for starting to operate flights at the Mărculești Airport. But given the pandemic, the project wasn’t implemented. “These regional hubs, I mean the airport in Mărculești, the airport in Balti, remain a priority for us and we will make investments, I hope starting with next year,” Igor Dodon stated in a new edition of the program “Igor Dodon responds”.
● SATURDAY, October, 24
2021 state budget law to be approved in November
Dispute the crisis through which the country goes owing to the COVID-19 pandemic, the authorities are prepared to make all the budget payments, such as salaries, pensions and other social benefits. Currently, the Ministry of Finance is in the process of drafting the state budget law for next year that is to be approved by the Government in November, Deputy Prime Minister Sergey Pușcuța, Minister of Finance, stated in the meeting of the Economic Press Club, being quoted by IPN. Sergey Pușcuța said the effects on the budget of the COVID-19 pandemic were first felt in April already. In that period, the average revenues decreased by about 30% on last April. In May, the situation improved and the revenues declined by 15% only on last May. In June, the budget revenues were higher than last year, but in August were similar to those of last August. The minister of finance noted the spending grew suddenly in the context of the pandemic – for the healthcare system, education, social assistance and for agriculture owing to the drought.
