Economic progress can be felt quickly in a small country like Moldova. In this regard, the authorities should improve the implementation of the budget and really start to build the dynamic of this is where the country is going and this is how they are going to get there, that will even overcome some of the risks and uncertainties around the regional environment, Mark Horton, Deputy Director of the European Department of the International Monetary Fund, stated in the podcast “Give Sense to Money”, IPN reports.
“Addressing very concrete and practical bottlenecks, very practical obstacles would help with growth. If issues like infrastructure, like the quality of roads, border crossings… If those can be addressed and progress can be made there, well that would be a big boost to growth. Then you can take a step back and look at things like implementation of the budget. Usually, in Moldova the outturn, the outcome of the budget is different than what was planned. And usually there's underspending. So, the budget is not necessarily working as effectively as it could to marshal funds to the right place. Usually, the underspending is in infrastructure, is in capital investment. So, improving the execution of the budget would be pro-growth.
“I think having a strong anchor around European integration and starting to make progress on that will give confidence, people will see it’s really going to happen. You know, it's really going to happen that we're going to integrate with Europe and that we're going to join the single market. And that will tell people, you know, I’d better invest, I’d better be out there first, you know, I’d better be the guy taking the credit, investing in some new machinery, some new equipment, some new process, because when it happens, I want to be the guy who's first in line and benefits from that. So, I think once you start to see progress. And it's happening, the government and the National Bank are preparing well for this process.
“You received a positive signal from the European Council in December that negotiations are indeed open. It’s a technical process. You have to get closer to the European standards and requirements in a number of areas. Once that process starts to move, I'm confident that there'll be a strong sign of confidence among households, among firms, there'll be more investment, there'll be more optimism and that will be another place for growth.”
According to Mark Horton, progress is felt very quickly compared to a much larger country, where these things did take more time. “So, this is also a way of encouraging the authorities to also move quickly, that they can sort of change direction, be nimble, be fast and move in a new direction very quickly.”
