IDIS expert forecasts IPI to drop 10 percent in 2009

In 2009 the index of industrial production is expected to fall by 10 percent, said Victor Parlicov, expert at the IDIS Viitorul think-tank. According to him, the worst affected will be the export-oriented industries – such as textile and clothing manufacturers, wineries and distilleries, canneries, etc. – because of the sliding demands on the foreign markets as well as as a consequence of the 'strong and stable leu' policy conducted by the governement, Info-Prim Neo reports. The enterprises which work mainly for the domestic market – like dairies or meat processing companies – will face a tough competition from importers, which will offer such kinds of products at lower prices, the expert said. Parlicov believes that in 2009 the slowdown will continue to affect the construction industry, with a 20 percent fall in output being expected. This will come on a decline in remittances from the Moldovans working abroad, and because of the difficulties faced by businesses in taking out loans for constructions, in particular the high interest rates. Foreign investment in equipment is also forecast to drop by 10 percent. At the same time, investments will be restricted to a narrow circle of businesses, dealing mainly in telecommunication and services as well as monopolies, like Moldovagaz, Union Fenosa, and Termocom. According to Victor Parlicov, the services sector will see stabilization, even with a potential slight drop in sales on a 10 to 12 percent fall in remittances. Retail sales will drop to a lesser extent, by approximately 5 percent.