The Gross Domestic Product in 2020 declined by 7% to 206.3 billion lei following the restrictions imposed to contain the COVID-19 pandemic, shows an analysis by the National Bureau of Statistics. As the demand declined pronouncedly, the global value chains were disrupted and the level of uncertainty is high, the companies reduced investment and export activity. The effects were expanded by the unfavorable weather conditions that led to a significant decline in the agricultural sector, IPN reports.
Last year, most of the sectors of the economy contributed negatively to the evolution of the Gross Domestic Product. Major influences are noticed on account of the agricultural sector and domestic trade in goods, retailing and wholesaling. In the crisis period, the economy was supported by the building sector. A positive influence was also exerted by investments in infrastructure that are financed from the Road Fund and foreign loans.
As to the demand, the restrictive measures imposed to stop the spread of the virus led to accentuated diminution of the population’s consumption. The consumption of services was affected mostly. The reduction in financial resources and the uncertainty created by the COVID-19 crisis led to a decline in investment activity. The crisis affected primarily the investments from the own sources of business entities. Investments in cars, equipment and buildings decreased essentially.
The pandemic crisis significantly influenced the flow of foreign investment, while the public investment was limited by the budget constraints. The reduction in foreign demand on the part of Moldova’s main partners resulted in a 15.5% decline in goods and services, while the diminution of consumption led an 8.9% reduction in imports.
