COVID-19 is putting a lot of pressure on business. Every second interviewed company in August-September operated partially, or closed, temporarily or even permanently. Economic sectors including HoReCa and manufacturing, that are predominantly represented by small and medium-sized enterprises (SMEs), which are largest employers in business, are facing decrease in sales, various uncertainties and decrease in demand, as well as shortage of liquidities. These are among the main conclusions of the socio-economic impact assessment of the pandemic crisis, led by UNDP Moldova, conducted with UNFPA, in collaboration with the State Chancellery and in close collaboration with the rest of UN System organizations, IPN reports.
The hardest hit economic sector remains accommodation and food services, as most hospitality venues were forced to close in spring. Hospitality employees were among the most affected in the overall economy especially the ones working in the urban areas. The average number of employees decreased in the 2nd quarter of 2020, compared with the similar period of 2019, with more than 60%.
Non-food wholesale and retail trade was severely impacted especially during lockdown, due to demand decrease, supply issues and decrease in production and non-food goods consumption.
Transportation was affected mainly due to the reduced passengers’ mobility and reduced demand for goods. By comparison to July 2019, the passengers’ traffic was reduced by almost 49%. The average number of employees within this sector also decreased in the 2nd quarter of 2020, compared with the similar period of 2019, by 15.7%.
Sales in manufacturing were affected by the dynamic of the external markets in the first two months of 2020, followed by a massive dropdown during the lockdown period (March-April), with a negative peak in April, with almost 50% decrease linked to quarantine period in the EU states.
The main challenge faced by agriculture is related to the draught that affected the country this year, corroborated with the poor irrigation infrastructure system. This led to a decrease of vegetal production by 26.8% in semester one of 2020 compared with the similar period of the last year.
The healthcare system is the most affected in terms of capacity and medical staff due to the current evolution of COVID-19 pandemic in Moldova. The medical personnel are overwhelmed and exposed to burnout in day-to-day activities.
The study proposes a series of policy recommendations, among them being: support for reintegrating and recruiting workforce; support for teleworking and working in shifts in factories; deferral of tax and social contributions payments for companies witnessing a drop in incomes; credit payment deferral for SMEs; providing preferential interest loans and governmental guarantees for SMEs; deferral of deadline for submitting financial statement and audit reports; e-commerce and transportation & storage support measures.
The assessment was conducted during May – October 2020 and was conducted using available studies, data available of the National Bureau of Statistics, a survey of Magenta Consulting, part of the UNDP study – conducted during August-September 2020 among 390 citizens and 450 companies – so as alternative sources of data.
