After two years of economic growth compared with the countries of the region, Moldova’s economy in 2015 shrank. Among the main factors that contributed to this were the drought of last year, which made the agricultural sector collapse, and the smaller growth of industry. These are some of the conclusions of the quarterly publication “Moldovan Economic Trends” that is produced by the National Institute for Economic Research (INCE). INCE director Alexandru Stratan noted that remittances, imports and exports declined last year, IPN reports.
According to the INCE director, even if the GDP in the first two quarters of 2015 grew by 3.6% compared with the corresponding period last year, a decline was witnessed in the third and fourth quarters and Moldova entered recession. In general, the decline was of 0.5%.
Amid this recession, the climatic factor, destabilization of the banking sector and the theft of the US$1 billion are factors that make the Institute believe that the economy will be anemic not only in the short term, but also in the medium term.
The INCE director said the reduction in incomes and purchasing capacity of the population in 2015 influenced down all the components of the GDP.
INCE researcher Viorica Popa said the annual rate of inflation in 2015 was practically 9.5%, exceeding by 3.2% the upper inflation target. This was due to the considerable depreciation of the national currency that resulted in a significant rise in food and nonfood prices.
The INCE researchers presented two economic development scenarios for 2016: an optimistic one and a pessimistic one. “The optimistic scenario envisions a more favorable evolution of all the macroeconomic indicators and a GDP growth of 1.2%,” said researcher Alina Ceban. According to her, this scenario is based on a number of forecasts, including a favorable agricultural year, a 3.5% rise in the investments in economy, a 7% increase in exports and a 6.7% increase in imports.
According to the pessimistic scenario, the GDP will decrease by 1.6% and other macroeconomic indicators will also decline. The industrial production will shrink by 3% following the negative trends in the last months of 2015.
