ECO-BUS WEEKLY DIGEST March 17 - 23 May. Most important Economy & Business news by IPN

● TUESDAY, May 18

European grants for entrepreneurs from Ungheni and Cahul regions

A new grants program of €700,000, benefiting companies, start-ups, and social entrepreneurship initiatives from Cahul and Ungheni regions, has been launched today. The financial assistance to develop the private sector in these two focal regions is provided by the European Union, in the framework the EU4Moldova: Focal Regions Program, financed by the EU and implemented by UNDP and UNICEF, IPN reports, quoting a press release of UNDP Moldova. EU Ambassador to the Republic of Moldova Peter Michalko said that this new round of grants for SME support will contribute to improving the daily life of citizens from Cahul and Ungheni regions. It will support entrepreneurs to roll out new investments and expand their businesses. “This is possible with EU support of almost €23 million to the Focal Regions program, having the goal to boost inclusive, green, smart, and sustainable economic development,” stated the official.

Milk production in Moldova down 38% in ten years

Milk producers in the Republic of Moldova are facing a long-lasting crisis, their production decreasing by 38% the past ten years. A study conducted by the Investment Agency shows the milk production the past several years declined considerably, from 485,000 tonnes in 2017 to 367,000 tonnes in 2019, while imports rose by 22% a year to US$58 million in 2019. The animal-breeding sector follows the same negative trend, confirming the crisis of the dairy farming. The number of cows decreased from 154,000 in 2011 to 81,000 in 2020, with only 6% of the milk used in processing coming from agricultural enterprises. The Investment Agency designed an investment plan that estimates the investments needed for creating a standard farm of 400 cows. The investment plan can be implemented at a cost of 12.979 billion lei.

ANAT asks to annul obligation to present PCR test when entering Moldova

The National Association of Tourism Legal Agents of Moldova (ANAT) requested the National Extraordinary Public Health Commission to annul the obligation to present the negative result of a PCR test when entering Moldova for the inbound and outbound tourism. In a letter signed by ANAT president Anna Colta, which is addressed to acting Prime Minister Aureliu Ciocoi, the operators ask to consider the opportunity of relaxing the entry conditions for Moldovan citizens and for foreigners with permits of stay in the Republic of Moldova. The request was formulated following the improvement of the pandemic situation in Moldova and globally and based on the experience of other states. According to ANAT, owing to the pandemic situation in 2020 – 2021, Moldova’s tourism industry (both inbound and, especially, outbound tourism) has been seriously affected. The multiple problems, such as the additional costs incurred for doing a PCR test for COVID-19, hamper the relaunch of the tourism sector in the Republic of Moldova despite the available theoretical possibilities.The situation is even more serious owing to the fact that the national tour operators have to return large sums of money collected as advance from tourists for the summer season of 2020.

● WEDNESDAY, May 19

EBRD becomes owner of Giurgiulesti International Free Port

The European Bank for Reconstruction and Development (EBRD) acquired 100 per cent of the capital of the Danube Logistics Group of companies on 7 May 2021. The EBRD thereby became the sole ultimate owner of Danube Logistics SRL, the operator of Giurgiulesti International Free Port. According to a press release, through its acquisition, the EBRD aims to promote a continuation of the successful operation and development of Giurgiulesti International Free Port and will seek to attract international investors to further support and develop the port. The EBRD has supported the construction and operation of Giurgiulesti International Free Port since 1995 and in 2013 replaced Credit Suisse as the primary economic beneficiary of the operation of the port following the refinancing of Danube Logistics’ outstanding loans by Credit Suisse.

Uncertainties around pandemic will keep economy below potential, WB

Uncertainties around the evolution of the pandemic and the political environment will keep the economy below potential. GDP is estimated to rebound to 3.8 percent in 2021, assuming favorable conditions including a successful rollout of vaccines. The economy is expected to gain momentum underpinned by the recovery in disposable income in part powered by resilient remittances, the positive fiscal impulse (higher public wages and transfers), and an accommodative monetary stance. Depressed global demand, combined with the recent drought, is expected to contain exports. Robust imports supported by the recovery in domestic demand will be a drag on growth. Most sectors are expected to bounce back, with agriculture leading after a bad yield in 2020, says the World Bank’s Moldova Economic Update that is quoted by IPN. According to the WB, economic growth in 2022 is expected to be similar to that of 2021 and is expected to only reach potential in 2023. All sectors will enjoy a rebound as consumer and investment confidence strengthens on the back of more favorable external conditions, dovish monetary stance and expansionary fiscal policy. Inflation is expected to remain lower than the NBM corridor of 5 percent +/- 1.5 pp in 2021-22 but to pick up as the recovery strengthens. Poverty, as measured by the US$5.50 PPP/day poverty line, is projected to increase 3.6 pp to 14.2 percent in 2020.

● FRIDAY, May 21

Gasoline and diesel fuel by 0.40-0.45 lei more expensive

After one of the oil companies raised the fuel prices in mold ova several days ago, the filling stations of another oil company posted higher gasoline and fuel prices today, May 21. The prices are by 0.40-0.45 lei higher. The new price per liter of gasoline “95” is 20.40 lei, as opposed to 20.00 lei a day ago. Gasoline “98” costs 21.20 lei, as opposed to 20.80 lei. The new price of diesel fuel is 16.80 lei, as against 16.35 lei. The fuel prices started to be raised in the middle of last December and have been increased for multiple times since then. The issue was discussed by the Supreme Security Council. At the end of March, the presidential administration asked that the Prosecutor General’s Office should investigate the existence of cartel agreements on the oil products market.

BEM, Banca Socială and Unibank collected over 2.6bn lei so far

The National Bank of Moldova (NBM) said the liquidators of Banca de Economii (BEM), Banca Socială and Unibank are taking measures to obtain earnings. Since their licenses were withdrawn, from October 2015 until March 31, 2021, they accumulate a total of 2,620,562.4 lei. In November 2014 – October 2015, the NBM provided emergency loans under state guarantees to Banca de Economii, Bănca Sociala and Unibank to the value of 14,121,758.0. The BEM received 9,273,217.0 lei, Banca Socială – 2,700,000.0 lei, while Unibank – 2,148,541.0 lei. According to the National Bank, the money available in the accounts of the three banks when the licenses were withdrawn and the money collected later by the liquidators are used to cover the costs associated with the liquidation process and to clear the debts related to the emergency loan.

● SATURDAY, May 22

Moldovan leu in April depreciated by 1.3% against U.S. dollar

The Moldovan leu in April depreciated by 1.3% against the U.S. dollar in average values down to 17.9600 USD/MDL, as against 17.7311 USD/MDL in March. According to the values at end-April, the leu depreciated by 1.2% against the U.S. dollar. According to the National Bank of Moldova, the degree of covering the net demand for currency from business entities by the net supply of currency from private individuals in April was 94.2%, as opposed to 85.69% in March. Against the previous month, the net supply of currency from private individuals rose by US$32.6 million (+16.6%), while the net demand for currency from business entities – by US$13.8 million (+6%). The Bank intervened and sold currency totaling US$9 million on the local interbank market.