In the first quarter of this year, GDP grew by 0.9% on the corresponding quarter of last year, as the seasonally adjusted growth was 0.5% on the previous quarter, the National Bank of Moldova (NBM) reported.

NBM ascribes the growth to a rise in investment. The growth, however, has been hindered by a pandemic-induced drop in consumption and exports. GDP is expected to decrease, as already reflected by most indicators available for April-May 2020.

In the second quarter, revenues to the national budget was down by 8.7% on the similar period last year. Expenditure also dropped slightly, by 0.1%. Interests on government securities decreased for all maturity periods.

Negative outlooks and the lockdown measures reduced consumption and caused deflation, as the Moldovan leu strengthened, prompting the central bank to further reduce the base rate. Regulated prices were relatively stable during the first two quarters.

Towards the end of the second quarter, rising bakery products prices and unfavorable weather conditions for certain crops created inflationary pressure on food prices that could manifest in the next period. This could be offset however by deflationary pressure associated with a reduced internal demand caused by the ongoing pandemic.