Deficit of the balance of trade to register record figures – experts

The deficit of the balance of trade will reach the record volume of USD 2 bln this year, economist Veaceslav Ionita forecasts, referring to the data from the “Economic Monitor”, published by IDIS “Viitorul”. The considerable difference between exports and imports generated a deficit of the balance of trade of USD 1.641 bln, by USD 440.6 mln more (+36.7%) against the similar index last year. At the same time, Ionita considers that the pace of exports against imports will be smaller this year. An optimistic turnover of 16% is planned in the case of the exports, and 27% - for imports, fact also forecasted by the Ministry of Finances when working out the budget for 2007. According to the expert, the increase in imports is driven by the fact that the population continues to have high consumption tendencies, they being grounded on the incapacity of the national economy to face the demand. According to the same predictions, the inflation rate will remain high and will reach 13.2% despite the consistent actions undertaken by the national Bank of Moldova to offset inflation worries. The increase of the base rate up to 14.5%, massive sterilisation and issuance of a record number of NMB certificates, amounting to about MDL 1.5 bln, which is 11-fold more compared with last year, are very important actions, but insufficient to reduce significantly the inflation rate, Ionita says, mentioning that its increase contributes to the high financial inflow on the market and incapacity of the national economy to turn it to good account. According to the expert, it is expected to see attempts to recoup the losses registered in agriculture and economy in 2006, and the greatest contribution in the GDP will be due to taxes, especially the customs duties and the tax on the imported goods. The forecast on GDP growth for 2007 is 4% according to Ionita. Although, “The Economic Monitor” mentions a slight increase of 3% in industry, Ionita says that the field will not manage to reach the achievements of 2005. Another worring tendency is the pessimism of the companies operating in industry in what concerns the possibility to perform sales on the domestic market, as well as potential increase in exports. Regarding the loans interest rate, the expert predicted a rate of 18-18.5%, by the end of the year, against the present share of 19%. In light of the lack of possible external shocks, Ionita considers that the national currency will remain stable, registering an average exchange rate of MDL 13.3 against USD 1. However, the number of persons employed in the national economy will continue to reduce, being forecasted a decrease of 5% in 2007, economist Veaceslav Ionita told Info-Prim Neo.