Moldova is on the edge of an economic crisis – experts

Moldova confronts with a deficit of capacities in managing the development process, on the background of economic crisis signals, the experts of the Institute for Development and Social Initiatives IDIS “Viitorul” consider. These declarations have been made public while launching “The Economic Monitor” for the second semester of 2006. Among the main conclusions drawn by the economic experts, the increase of the agricultural production will not exceed 2%, the industry of the Republic of Moldova is already dealing with a serious systemic crisis, and the foreign trade will be transformed very soon into a unilateral commerce, dominated by imports. The economic expert Veaceslav Ionita mentioned that little growth percentage of the agricultural production represents an obvious standstill in the situation when agriculture is very important for the economy of the Republic of Moldova. The harvest of grains will be lower compared with 2005 and will constitute 900 mln tones. At the same time, in the zootechny area positive evolutions will not be registered as in 2005, the quoted source said. In the most optimistic case, the industrial growth in 2006 will not exceed 2.5%, but there is a great possibility that the year will end with a significant decrease of the industrial production, Ionita says. According to him, the industrial crisis was generated by the lack of economical and social development policies, dependence of exports on external markets, suspicious sells of some assets of the wine area in 2003-2004, underdeveloped financial market and the small volume of investments etc. The experts consider that the deficit of the commercial balance at the end of the year will amount to MDL 1.5bln and the coverage rate of imports with exports will diminish from 46.8%, at present, to 42% - at the end of the year. In other words, at each MDL 100 of imports, the economy of Moldova will export only MDL 42. Export’s diminishing to Russia did not lead to redirecting the production to other markets and at present the tendency of reducing exports to all economic partners of Moldova is standing out. The experts foresee a standstill of the increase of payments in the state budget in 2006, emphasizing the exhaustion of the increase of budgetary incomes. By the end of the year the state budget will amount to MDL 8.8bln, by only 5% more than planned, Info-Prim Neo informs.