Economic growth in Moldova fueled by larger consumption

The International Monetary Fund (IMF) forecasts the economic growth in Moldova in 2010 will be 3.2%, while in 2011 – 3.5%, Info-Prim Neo reports, quoting the last IMF report on the development prospects of the regional economy after the world crisis. In a news conference, IMF Permanent Representative in Moldova Tokhir Mirzoev said the floods and restrictions imposed on the export of wine to Russia caused damage to Moldova, but not as considerable as thought earlier. The measures to revitalize the budget and public finances sector and to stimulate entrepreneurial activity have led to a rapid economic recovery. The economic growth in 2010 and 2011 may be larger than the IMF projected. “Unlike other East-European countries, where the economic growth after the crisis was fueled by the larger exports, in Moldova it was obtained on the basis of larger consumption, which represents 4.9% of the GDP,” said Tokhir Mirzoev. “The rising consumption, especially after the periods of crisis, plays an important role in development, but Moldova must concentrate on the identification of factors that would ensure sustainable economic growth.” Tokhir Mirzoev mentioned the extension of structural reforms in industry and agriculture, continuous improvement of the business environment and attraction of national and foreign investment to develop the economy, diversification of exports and the rise in exports. According to the IMF forecasts, the inflation rate in Moldova in 2010 will be 7.4%, while in 2011 – 6%. The IMF predicted all the European countries will see a GDP growth in 2010-2011. The growth in the countries with a developed economy will be 1.7% in 2010 and 1.6% in 2011. In the countries with markets in the process of formation that managed to overcome the economic and financial crisis, the growth is projected to be 3.9% in 2010 and 3.8% in 2011. The report says the situation in these countries will depend on the developments in the European countries with advanced economies, which will affect mainly the foreign trade and capital flows.