ECO-BUS WEEKLY DIGEST February 21-26. Most important Economy & Business news by IPN
● MONDAY, February 21
Instruments applied by NBM to fight inflation produce small effects, economist
The price situation in the Republic of Moldova is dramatic as the prices reached the highest level in the last 20 years and are forecast to rise for at least half a year more. Economist Veaceslav Ioniță said the National Bank of Moldova (NBM) has limited instruments to fight corruption and the effects these can produce are rather small. The base rate on consumer loans in the third quarter of 2021 was at only 4.6%, which is the lowest level in the country’s history. After the base rate was increased, the interest rate on consumer loans grew considerably, to 9.2% in the fourth quarter of last year. As a result, the volume of new loans raised by the population for consumption decreased from 4.4 billion lei in the third quarter of last year to less than 4 billion lei in the fourth quarter. The rate on home loans grew insignificantly, from 8.1% to 8.4%. The base rate in January 2022 was 8.1%, up from 5.5% in the third quarter of last year. Such a rise means additional costs of 120 million lei associated with the loans raised by the Government. If the NBM hadn’t increased the base rate, this money would have been saved by the Government, but the inflation rate would have been much higher and the Government would have spent the saved money on increasing the pensions and the salaries of public sector employers and on paying subsidies to socially deprived groups.
Power systems of Moldova and Ukraine will work in isolated regime on Feb. 24-26
The February test is the first stage of the synchronous interconnection of the electrical energy systems of the Republic of Moldova and Ukraine with the ENTSO-E Continental Europe network A similar exercise was planned in summer functioning regime. “The tests form part of the action plan that is described in detail in studies concerning the synchronous interconnection of the electrical energy systems of the Republic of Moldova and Ukraine with ENTSO-E that were recently finalized and that proved the technical feasibility of the interconnection,“ said the quoted source.
●TUESDAY, February 22
Moldova-Russia Business Union launched officially
Former President Igor Dodon on February 22 launched the public association Moldova-Russia Business Union whose goal is to assist companies in identifying commercial partners, to implement investment projects and to develop cooperation relations in such areas as industry, agriculture, infrastructure, tourism, transport, logistics, municipal services and information technology. The companies interested in joining the Union are urged to submit purposes, initiatives and project ideas that can bring benefits to Russian and Moldovan businesses. “In several months, at most until autumn, our Union will become the main association, the main liaison between business entities of Moldova and Russia,” stated Igor Dodon.
Moldovagaz to ask PGO to investigate publication of contract with Gazprom
SA “Moldovagaz” said it will file a complaint to the Prosecutor General’s Office by which it will ask to hold the persons who published a copy of the contract with Gazprom accountable. The reaction comes after the press disseminated a copy of the confidential document that refers to the contractual relationship between SA “Moldovagaz” and SAP “Gazprom”, IPN reports. Deputy Prime Minister Andrei Spînu, Minister of Infrastructures and Regional Development, said that he does not comment on the authenticity of the document published by the press. “I repeat what I said for multiple times: the contract signed by “Moldovagaz” and “Gazprom” cannot be published without the consent of these,” stated the official.
●WEDNESDAY, February 23
Government endorses agreements to build bridges over Nistru and Prut
The Government approved the signing of an agreement with Ukraine to build a crossborder road bridge over the Nistru, on the Moldovan-Ukrainian border, near Cosăuți-Yampil, the agreement with Romania to build a bridge over the Prut, between Ungheni in Moldova and Ungheni in Romania, and the agreement to rehabilitate the Giurgiulești-Galați border bridge, IPN reports. The bridge on the Moldovan-Ukrainian state border will be 641 meters long and will have two lanes and two cycle tracks, two sidewalks and a pier with a length of 667 meters on the Ukrainian side, said Lilia Dabija, secretary general of the Ministry of Infrastructure and Regional Development. Each of the sides will cover the costs associated with the building of the bridge on their own territories. The access road to the bridge in Moldova is to be built at a cost of 900 million lei. The works to build the bridge over the Prut, between Ungheni in Moldova and Ungheni in Romania, will last for two years. The Government of Romania will cover the costs of works to build the bridge and the access way, including the related infrastructure located on its territory. These were estimated at €40 million. The building of the access road and the related infrastructure on Moldova’s territory will be financed by the Government of Moldova, being estimated at €2 million.
Inactive farmsteads will be struck off tax register
The inactive peasant farmsteads will be struck off the Register of Peasant Farmsteads and the State Tax Register of Peasant Farmsteads. The list will be compiled by the State Tax Service. According to Minister of Finance Dumitru Budianschi, slightly over 111,000 peasant farmsteads were registered on January 31, 2022. Over the last three years, statements about the activity of peasant farmsteads were submitted by over 25,000 entities. An incorrect picture of the state’s agricultural potential is created and this generates confusion about the business entities operating in agriculture. On the other hand, the citizens accumulate enormous debts to the state social insurance budget, but they don’t know about them as the peasant farmstead was registered without the persons knowing that an entrepreneurial type of activity was registered in their name.
Request to annul termination of contract to concede airport rejected
The judges rejected the claim of “Avia-Invest” against the Public Property Agency by which this asked to annul the termination of the contract to concede the Chisinau International Airport as unfounded. A decision to this effect was taken by the Râșcani Court of Chisinau, IPN reports, quoting a press release of the institution. The court judgment is not yet final. “Avia Invest” can challenge it in the Chisinau Appeals Court.
●THURSDAY, Febryary 24
Air Moldova suspends all flights until March 4
Air Moldova airline suspended all the flights to and from the Republic of Moldova following the authorities’ decision to close the Moldovan airline until March 4. The flights going to Chisinau will be redirected to Iasi, it is said on the Government’s Facebook page. The decision started to be applied at midday.
NBM in connection with Ukraine events: Banking sector remains stable
The banking sector of the Republic of Moldova remains stable, robust and resilient. It has sufficient liquidity to ensure continuous functioning in an ordinary regime, the National Bank of Moldova (NBM) said in connection with the events in Ukraine. It noted that it prudently monitories the situation and is ready to take measures to diminish the risks and uncertainty in accordance with its duties.
Moldova Railways to relaunch Iasi route sooner than planned
Passenger train services on the route connecting Chisinau to the Romanian border city of Iasi will be resumed starting tomorrow, sooner than originally planned, Moldova Railways announced. The only train assigned to the route will run on Fridays, departing from Chisinau at 6:40AM and arriving in Iasi at 11:13AM, with the return journey leaving at 5:40PM and arriving at 9:52PM.
Natalia Gavrilița: No immediate risk of gas, power supply disruptions
There is no immediate risk of Moldova experiencing gas or power supply disruptions, Moldovan Prime Minister Natalia Gavrilița told a news conference on Thursday evening. Earlier, Moldovagaz, too, said gas supplies were coming in as usual and in the amounts agreed with the supplier.
●FRIDAY, February 25
Chisinau-Odessa train route suspended by Commission for Exceptional Situations’ decision
The Republic of Moldova suspended the Odessa-Chisinau train route. The decision was taken by the Commission for Exceptional Situations in connection with the developments in Ukraine. The provision is stipulated in the Commission’s February 24 decision. The Parliament of the Republic of Moldova adopted a decision by which a state of emergency was declared nationwide for a 60-day period, starting with February 24, in connection with the situation in Ukraine.
Bank accounts opened for donations for Ukrainian citizens
Business entities and private individuals can make donations in support of the Ukrainians through a special account opened by the Ministry of Finance. Transfers can be made in Moldovan lei, in U.S. dollars or in euros. The Chisinau City Hall also opened bank accounts for donations, IPN reports. The Ministry said the money that will be accumulated in these accounts will be used to provide humanitarian assistance to the war-stricken citizens of Ukraine.
Export of wheat and sugar is banned during state of emergency
The export of wheat and sugar from the Republic of Moldova is banned during the state of emergency, as from March 1. A decision to this effect was taken by the Commission for Exceptional Situations.The Ministry of Economy, in concert with the Ministry of Agriculture and Food Industry, will step up efforts to monitor the fluctuation of prices and the grain stores on the domestic and foreign markets and well weekly report to the Commission for Exceptional Situations.
List of bare essentials on which profit margin is limited extended
The Commission for Exceptional Situations extended the list of the most necessary products on which the profit margin is limited. The measure was taken in a bid to stop the unjustified rise in prices, Prime Minister Natalia Gavrilița stated after the meeting of the Commission, IPN reports. The pork on bone, poultry, frozen fish, sugar beet sugar, eggs, pasta, potatoes, onion, white cabbage, fresh carrot and beet were added to the list. Minister of Economy Sergiu Gaibu said the taken measures were discussed with representatives of the commercial chains, who showed solidarity. For the limitation of the profit margin not to influence the suppliers of these goods, there was also limited the application of retro bonuses, marketing costs and other instruments that are usually used in shop chains.
Contract with electricity supplier will be extended for a year at current price
The authorities decided to prolong the contract with the supplier of electrical energy at the current price and to maintain the current financial and contractual conditions until March 31, 2023. “The contract was extended for a year at the same price,” Prime Minister Natalia Gavruilița stated after the meeting for the Commission for Exceptional Situations. The Commission also decided to suspend the tendering procedures for purchasing electricity announced earlier.
Procedure for reviewing electret rates suspended for a month
The Commission for Exceptional Situations suspended for a month the procedure for reviewing the electricity rates. In the period, the Ministry of Labor and Social Protection will design a program to cover a part of the costs for electrical energy incurred by socially deprived categories of people.The Commission also decided to suspend the tendering procedures for purchasing electricity announced earlier, to prolong the contract with the supplier of electrical energy at the current price and to maintain the current financial and contractual conditions until March 31, 2023.
National Bank on undervalued exchange rates for hryvnia
The National Bank of Moldova has launched consultations with Ukrainian authorities to find solutions for the refugees looking to change hryvnias in Moldova.Today commercial banks and separate foreign exchange desks in Moldova were buying hryvnias for as little as 0.01 leu, to the dismay of the thousands of Ukrainian refugees running for their lives from the war that started on Thursday in the neighboring country. The Bank said in reaction that it has taken increased steps to supervise foreign exchange operations, adding however that operators are free by law to set both buying and selling rates as they see fit. The Bank said it will involve licensed banks in finding a solution, one where the poorly convertible currency is rapidly bought back by Ukraine.
●SATURDAY, February 26
Commission for Exceptional Situations agrees measures to control prices
The Commission for Exceptional Situations approved a series of measures to prevent the unjustified rise in prices and to efficiently ensure the protection of Ukrainian refugees, IPN reports, quoting the Government’s press service. The Commission decided to extend the list of the most necessary products on which the profit margin is limited so as to stop the unjustified rise in prices. The pork on bone, poultry, frozen fish, sugar beet sugar, eggs, pasta, potatoes, onion, white cabbage, fresh carrot and beet were added to the list. For the limitation of the profit margin not to influence the suppliers of these goods, there was also limited the application of retro bonuses, marketing costs and other instruments that are usually used in shop chains. Also, the Ministry of Labor and Social Protection will design a program to cover a part of the costs for electrical energy incurred by socially deprived categories of people. To increase the security of critical infrastructure, including in the field of cybersecurity, a new administrator was named at SRL Avia-Invest for the period of the state of emergency.