Euromonitor: Moldova’s economic development was compromised by the industrial recession and economic conflict with Russia

The economic development of Moldova was jeopardized in the first quarter of this year by the industrial recession and by the unending economic conflict with Russia. These are the conclusions of the most recent issue of “Euromonitor” report, published by the ADEPT Association for Participatory Democracy and by the “Expert-Grup” analytic centre. According to the experts, the economic stagnation aggravates the structural misbalance of Moldova’s economy, the poverty and the income gap. Although the salary is growing in real terms, there is also a significant decrease in the purchasing power of the workers in the sectors like industry, education and health. The macroeconomic stability is nevertheless ensured by the National Bank of Moldova, due to its active participation within the monetary market with sterilisation operations, thus reducing but not entirely eliminating inflation threats. The specialists are deeply concerned with the 19% increase in expenses incurred by industrial producers, attested in February, as this could lead to price increases. According to “Euromonitor”, the downward trends of the international trade in the first quarter of 2007 (considerable growth of the imports and stagnation of the exports) were much sharper than in 2006. The embargo imposed the Moldovan on wine was the most severe obstruction that shaped the country’s economy. At the same time, the initiation of the procedures for obtaining the Autonomous Commercial Preferences with the EU is considered a significant improvement – an outcome of a proactive attitude of Moldovan diplomats for fulfilling the technical requirements and of the availability of the European Commission to facilitate the commercial relations with Moldova. The most significant drawbacks of the external trade in the reported period were the interdiction by the Agro-Industrial Agency “Moldova-Vin” to export and sell bulk wine, Belarus’s response of banning imports of bottled wine, and the “solution” found to it of letting a single company to export wine to this country.