MONDAY, 6 September
Real estate market took a break following 20% surge in prices, expert
After a sudden rise of over 20% in prices, the real estate market took a break. The transactions in the second quarter witnessed the lowest level in the last five years, said Veaceslav Ioniță, expert in economic policies of the Institute for Development and Social Initiatives “Viitorul”.
According to the expert, apartment price in the Republic of Moldova started to rise in the second half of 2020, increasing too suddenly after 12 years of decline and this scared the potential buyers away. This tendency will continue in the short term during the next few months. In the long run, the number of real estate transactions will be large in the municipality of Chisinau, where many apartments will be bought for investment purposes.
Traditionally, 14,000-15,000 real estate transactions, especially to purchase apartments, were annually held in the Republic of Moldova until 2015. Starting with 2019 until present, the number of transactions increased to about 28,000. In the second quarter of this year, the number of transactions in the country and in the municipality of Chisinau was the lowest in the past five years.
An explosion has been seen in home loans, which until 2005 hadn’t been in demand. Starting with 2018, the value of mortgages has risen to 10 billion lei. The average area of a new apartment is now 65 square meters. A lot of apartments are currently bought for investment purpose, for being leased out.
The Republic of Moldova is turning into a market where the people live in rented accommodations. Fifteen years ago, only 6% of the inhabitants of Chisinau municipality rented houses. At present, this figure stands at about 13%. The European average is of 40%. Apartment rental is typical of persons who spend less than 20% of their incomes on food a month. Of those who live in rented accommodations, 45% are single persons who do not live with parents. They have a job and appropriate incomes, but do not own dwellings. Another 25% are young families without children. 10% are families consisting of two persons, usually a parent and a child.
The highest apartment prices in Moldova were recorded in 2019-2020. Since the second half of 2020, the prices grew by at least 20% and this is the biggest rise in the past 14 years. In Chisinau, new apartments cost over €800 per square meter, while resale apartments – over €670.
The apartment prices rose too suddenly and sales in the second quarter of 2021 declined to the lowest level in the past five years. “Our market is not yet ready for this sudden rise of 20%, which scared the citizens, who became more prudent. The real estate market is adjusting to the new conditions. I think an annual rise of 10% would be easier assimilated,” stated Veaceslav Ioniță.
According to him, the accessibility of an apartment in the Republic of Moldova is closer to the European average. 9.8 years of work and gains are needed to buy an apartment. The European average is 6.9 years.
Igor Talmazan named Customs Service director
Igor Talmazan was appointed director of the Customs Service. He took up his duties on September 6. The new director was presented to the staff by Minister of Finance Dumitru Budianschi.
According to the Ministry of Finance, Igor Talmazan is a public law specialist. He earlier served as the chief of staff of a parliamentary group head. After the snap parliamentary elections of July 11, 2021, he became an MP. In 2019, he headed the Prime Minister’s Control Body. Earlier, he held the posts of head of the State Ecological Inspectorate of the Republic of Moldova and of deputy minister of environment.
Ex-director of the Customs Service Sergiu Burduja resigned on September 1.
IDEP Moldova calls on authorities to support ECIPES program
The Institute for Development and Expertise of Projects (IDEP Moldova) calls on the Moldovan authorities to back the citizens, mayors and young people and to increase the absorption of European funds by supporting the ECIPES program that aims to provide European funding using the electronic signature.
In a news conference at IPN, IDEP programs director Iurie Calestru, co-author of the ECIPES program, said the beneficiaries of the program can be young people between the ages of 18 and 35 seeking to launch a business (€5 000 for a venture in the services sector or € 15 000 for a manufacturing venture, €12 000 being earmarked for the purchase of equipment or tools); Moldovan municipalities that are twinned with EU municipalities and organize at least one annual joint activity, a maximum or €10 000 in EU funding is to be channeled into a single local development project whose total value does not exceed €20 000, and Moldovan citizens wishing to replace their electrical appliances with A +++ items (€100 per citizen who hands over used equipment).
According to Iurie Calestru, the actions support the EU objectives, including the European Climate Pact. IDEP requested the European Commission to constitute a working group for developing this program with the involvement of the European Parliament, the European Committee of the Regions, representatives of the Republic of Moldova. IDEP can provide comprehensive information and the opinions of all the involved sides. The European Commission waited for an approach from the central authorities of the Republic of Moldova, but nothing happened.
The current authorities presented such initiatives as the fight against corruption, building of authentic rule of law, increasing pensions to at least 2,000 lei and these authorities should be interested in ensuring European funds, directly from the European Commission, for the citizens, mayors and young people, using the possibilities of information technologies, in accordance with the priorities of European institutions, creating also conditions for digital and ecological transitions.
During 24 months, the program had been consulted with European institutions and a legislative proposal for exempting the export of used equipment within this program from taxes was formulated and submitted. There were identified the legal provisions that create the normative framework needed for developing and implementing this program without the participation of any rapid player.
Iurie Calestru noted that owing to the fact that the whole program will be based on an online program, with a digital signature to be used for direct contact, the Republic of Moldova will align itself with the European directives. To develop a similar program, the authorities should take 90% of the actions that were already taken by IDEP. This effort will last, but the country does not have so much time.
TUESDAY, September 7
Moratorium on issuing of permissive documents for building in historical center until 2022
The Chisinau City Hall imposed a moratorium on the issuing of any permissive documents for carrying out building works in the historical center of the city until April 1, 2022, mayor general of Chisinau Ion Ceban announced.
According to him, the moratorium will be in force until the Centru Zonal Urbanistic Plan is worked out. The plan is to be completed until 2022 if the local and central authorities ensure cooperation.
Ion Ceban noted that he was at the building site situated at the intersection of the streets Mitropolit Dosoftei and Serghei Lazo, where a building with six or maximum seven stories was to be erected, according to the issued documents. There is currently information that the real estate agent sells apartments on the eighth, ninth and tenths floors. Those in charge of the building site and a commercial director who came to the site could not explain exactly what they were building. Respectively, the mayor instructed to suspend the permissive documents until the situation is clarified.
Also, a meeting with builders, councilors, MPs and experts in the field will be called until the end of September to discuss and listen to all the positions. Shortly afterward, the City Hall will propose amendments to the legislation on construction works and deserted buildings.
WEDNESDAY, September 8
Government approves pension rise
On October 1 this year, all the pensioners in the Republic of Moldova will benefit from an indexation of 3.86% in pensions. The package of laws was approved by the Government on September 8. In parallel with the indexation, those who get old-age pensions lower than 2,000 lei will receive higher pensions, said Prime Minister Natalia Gavrilița.
CNPF reports reduction on secondary segment of capital market
A reduction on the secondary segment of the capital market was recorded in 2020. The total volume of transactions was 1.7 billion lei, a decrease of about 3.6 billion lei or of 68% compared with 2019, shows a report nonbank supervision by the National Commission for Financial Markets (CNPF) that was presented today in the meeting of the Parliament’s commission on economy, budget and finance.
The report shows that the subscribed gross premiums on the insurance market, after seeing a relatively constant growth during the last few years, in 2020 witnessed a decline, primarily the premiums deriving from the sale of Green Card certificates.
In the nonbank lending sector, 154 nonbank lending organizations authorized to perform activities and 228 savings and loan associations were put on the Register of Authorized Nonbank Lending Organizations by December 31, 2020. The volume of loans provided by these came to 10.6 billion lei, an increase of over 275 million lei on 2019.
Administration of CNFP dismissed
The members of the Administration Board of the National Commission for Financial Markets (CNFP) were discharged. A decision to this effect was taken by Parliament after examining the Commission’s annual report for 2020, at the suggestion of the commission on economy, budget and finance.
After the examination of the report and the round of questions and answers that lasted for about three hours, the commission on economy, budget and finance presented its report. This says CNPF didn’t take actions or took late actions in relation to the insurance market. The regulation of the activity of nonbank lending organizations was also criticized. The commission ascertained that the quality of the loans provided by these organizations has worsened. The over-indebtedness of some of the citizens expands, while some of the organizations commit abuses.
As many as 54 PAS MPs voted for the removal of the members of the Administration Board of the National Commission for Financial Markets. The MPs of BCS and Șor Party abstained.
The Administration Board of CNPF consisted of: Valeriu Chițan – head, Nina Dosca – deputy head, Iurie Filip – deputy head, Victor Captari and Viorel Miron – members.
Liquefied petroleum gas sold for almost 13 lei
A network of filling stations increased the price of liquefied petroleum gas to nearly 13 lei a liter. The price of liquefied petroleum gas during summer rose by over 1 leu.
While the given filling stations sell a liter of liquefied petroleum gas for 12.95 lei, at other gas stations this cost between 12.07 lei and 12.82 lei a liter. At the beginning of summer, a liter of liquefied petroleum gas sold for about 11.30 lei.
Currently, a liter of gasoline “95” costs almost 20.50 lei, while a liter of diesel fuel – between 16.40 and 16.62 lei.
The National Agency for Energy Regulation set the following retailing price ceilings for the main oil products of standard type for September 8: gasoline COR 95- 20.52 lei/liter, while diesel fuel – 16.63 lei/liter. The Agency does not set the price ceilings for liquefied petroleum gas.
THURSDAY, 10 September
Quality of loan portfolio worsened slightly, NBM
The first semester of this year witnessed a rise in assets, loans, deposits of private individuals and own funds. According to the National Bank of Moldova, the banking sector has a high level of liquidity. The profit made in the first semester rose compared with the corresponding period last year. But the deposits of individuals decreased in value compared with the end of the previous year, while the quality of the loan portfolio worsened slightly.
On June 30, the total assets came to 109.7 billion lei, increasing by 5.7% in the first half of 2021. The consumer loans grew by 19.5% (1.5bn lei), while mortgages rose by 18.1% (1.4bn lei).
In the reference period, the nonperforming loans (substandard, dubious and compromised) increased by 0.1 percentage points to 7.5% on June 30, the indicator varying from 2.5% to 13.7%, depending on the bank.
The nonperforming loans in absolute value grew by 11% (370.1m lei) to 3.7 billion lei. In the analyzed period, the expired loans decreased from 4.5% to 3.9% of all the loans.
Eleven banks authorized by the National Bank worked in Moldova on June 30. “Energbank” SA was under early supervisory intervention that was applied on January 11, 2019 following the identification of a group of persons who acted concertedly. These persons bought a qualified shareholding of 52.55% of the bank’s share capital without the preliminary written consent of the National Bank. Later, by the decision of the NBM’s Executive Board of April 9, 2021, the tenure of the temporary administrators f “Energbank” was extended until October 29, 2021.
On June 30, the profit of the banking system totaled 941.7 million lei, an increase of 34.0% (238.9m lei) compared with the corresponding period last year.
FRIDAY, September 10
Government thinks up measures to support hospitality industry
The Government is finalizing a plan of measures to support the hospitality industry in the immediate period if the number of COVID-19 cases continues increasing, Prime Minister Natalia Gavrilița stated in a working meeting with members of the National Association of Restaurants and Leisure Places of the Republic of Moldova (MĂR).
These were also analyzed measures that can keep the infection under control and can make the activity of the units of the hospitality industry possible.
In this connection, Natalia Gavrilița said that the Government is considering the possibility of instituting a number of support measures, such as subsidization of the reduced working hours for employees.
MĂR Association president Aneta Zasavitski spoke about the necessity of creating an active secretariat of the National Extraordinary Public Health Commission and having consultations with the expert associations before the Commission adopts its decisions.
According to the Government’s press service, the representative of the business community expressed their readiness to contribute to working out and implementing clear and efficient epidemiological protection measures so as to be able to further work in conditions that are safe for the citizens.
About 40 national road sections are over 65% damaged
Approximately 40 national road sections are over 65% damaged, while the local roads lack over 2,800 traffic signs. Ten bridges situated on national roads and 14 local roads do not meet the safety norms. The participants in the meeting of the Road Fund’s Board, together with the Cabinet, analyzed these data and proposed a number of measures, including raising the allocations for mainlining roads in winter.
Sergiu Bejan, acting director general of the State Road Administration, said that 1 532 059 was allocated for maintaining and repairing national public roads and engineering constructions this year. Only 504 448 of this sum was used until August 1.
Prime Minister Natalia Gavrilița said the Road Fund should be managed in a transparent way and with maximum efficiency, in the interests of the citizens. A mechanism by which each citizen can see the roads that are under repair, according to what criteria they were selected, how much money was allocated for works, who is the contractor and how the quality of works is assessed is needed. The citizens should be able to report irregularities and eventual abuses through this mechanism.
The network of national public roads that is managed by the State Road Administration is 5 902 km long. The works to maintain the national public roads are executed by 11 specialized enterprises S.A. “Drumuri” that employ about 1,950 persons.
Over 38,000 companies received assistance through EU4Business
More than 38,000 companies in Moldova received assistance through the agency of the EU4Business Initiative in 2019-2020. Of these, 553 entrepreneurs got loans to the total value of €101.16 million as part of the EU programs to support Small and Medium-Sized Enterprise (SME). There were offered 37,364 consultations.
The EU Delegation to the Republic of Moldova said that in 2020 alone, owing to the EU’s support, 11,418 persons got a job. For example, Gheorghe Avornik, founder of the lyceum Litterarum, received a grant and loan from the EU4Business-EBRD credit line through Victoriabank. The loan covered 15% of the financing. This opportunity enabled him to renovate the school’s building, to demolish the old roof and to build a new one. All the windows were replaced, while energy infrastructure was renovated.
Denis Korablev, who runs an eco-friendly luggage business, benefited from a grant within EU4Business-EBRD for purchasing an automated production line. This helped him diversify production and, amid the pandemic, he started to export medical masks and gowns to other countries, including Italy and France.
The Eu4Business Program offers support and encourages small and medium-sized entrepreneurs to improve the quality of their products and to modernize services.
SATURDAY, September 11
Over 38,000 companies received assistance through EU4Business
More than 38,000 companies in Moldova received assistance through the agency of the EU4Business Initiative in 2019-2020. Of these, 553 entrepreneurs got loans to the total value of €101.16 million as part of the EU programs to support Small and Medium-Sized Enterprise (SME). There were offered 37,364 consultations.
The EU Delegation to the Republic of Moldova said that in 2020 alone, owing to the EU’s support, 11,418 persons got a job. For example, Gheorghe Avornik, founder of the lyceum Litterarum, received a grant and loan from the EU4Business-EBRD credit line through Victoriabank. The loan covered 15% of the financing. This opportunity enabled him to renovate the school’s building, to demolish the old roof and to build a new one. All the windows were replaced, while energy infrastructure was renovated.
Denis Korablev, who runs an eco-friendly luggage business, benefited from a grant within EU4Business-EBRD for purchasing an automated production line. This helped him diversify production and, amid the pandemic, he started to export medical masks and gowns to other countries, including Italy and France.
The Eu4Business Program offers support and encourages small and medium-sized entrepreneurs to improve the quality of their products and to modernize services.
EBRD launches online “hands on” guidance to help micro and small enterprises
The European Bank for Reconstruction and Development (EBRD) is launching an online resource with legal and business guidance to support micro, small and medium-sized enterprises to enhance their response to new challenges following the COVID-19 pandemic, IPN reports, quoting a press release of the Bank.
The platform provides expert advice on various topics including legal and financial matters. Additional tailored guidance was developed for Georgia, Moldova and Ukraine.
The new website offers expert guidance to help owners and managers deal with suppliers, customers and employees, steer operational and financial challenges and navigate a restructuring process. The platform also provides businesses with legal guidance in corporate, employment and insolvency law, areas in which small business have strong demand for know-how and information.
Launched by the EBRD as part of its enhanced support for SMEs in the context of the coronavirus crisis, the website is structured around six modules or entry points: developing your business strategy; managing your people successfully; running your business successfully; taking your business online; keeping your business’s finances healthy; restructuring your business finances.
Templates and cases studies support the guidance and help users to apply concepts in their day-to-day operations. The information is freely available in English and Russian and designed for use by every economy where the EBRD operates. No registration is required to use the site.
The website also contains three separate country pages for Moldova and Ukraine that offer country-specific advice in local language. The country pages of the project are funded with aid from the UK Government through the Good Governance Fund.
