ECO-BUS WEEKLY DIGEST November 25-December 1. Most important Economy & Business news by IPN
● MONDAY, November 25
Government intends to build and repair 1400 km of national roads
The government intends to build and repair 1400 kilometers of national roads, with investments estimated at 1 billion 400 million euros. On Monday, at the press conference held after the trilateral meeting of the country's President, the Speaker of the Parliament and the Prime minister, Prime minister Ion Chicu has said that in the next period the Government will focus on completing the road works that have been started. The total length of these roads is of 426 km and the overall cost constitutes 319 million euros.
Currently, there is no agreement on the Russian credit line for Moldova, prime minister
Prime Minister Ion Chicu says that there is no agreement yet on the $ 500 million that the Republic of Moldova is to borrow from the Russian Federation. In the near future, the Russian side will evaluate the sustainability of the potential debtor, that is, the Republic of Moldova. Statements in this regard were made by Prime Minister Ion Chicu on Monday, at a press conference. According to the prime minister, if this agreement is signed, the money will reach the country in installments. For next year the amount discussed is of $ 300 million. The government will present all the information to the potential lender, including the destination of the money to be borrowed
Half of remittances are sent from EU
Over the course of the first ten months of this year, the total volume of bank transfers of money from abroad for individuals from Moldova amounted to 1 013.39 million dollars, 5% less than in the same period of the previous year. In October, remittances sent via licensed banks totaled 110.44 million dollars. Half of the transfers came from the European Union, just over 21% are from the CIS, while almost 29% were sent from other parts of the world.
Ion Chicu: We cannot afford to enter the new year without approved budgets
By December 20, the Republic of Moldova must adopt the budgets for 2020. On Wednesday, November 27, the Government will approve the budget-fiscal policy and submit it to Parliament. Statements in this regard were made by Prime Minister Ion Chicu at a press conference. The prime minister has said that at the meeting of the government on November 27 there will be also approved previously announced social projects which have already been converted into draft laws to amend the legislation. In addition, the intergovernmental commissions co-chairs on the part of the Republic of Moldova will be appointed.
● TUESDAY, November 26
Ion Chicu: EU money is important, but not enough for our modernization plans
Prime minister Ion Chicu says that the money Moldova receives from the European Union is important, but not enough for the country’s modernization plans. Therefore, the Moldovan authorities will turn to international financial institutions or other states for additional loans. “We will do everything to maintain this beneficial cooperation between Moldova and the EU, we will meet the conditions set for the second instalment, the third of the macro financial assistance, but this is not enough and we cannot count on this support alone”, stated the prime minister during the talk-show “Puterea a patra” on N4.
Banking system profits totaled 1.8 billion lei at end of September
Banking system profits totaled 1.8 billion lei at the end of September, increasing by 32.5% compared to the same period of the previous year. According to the National Bank of Moldova, the increase in profits was largely determined by the increase of non-interest income by 14%, which amounted to 265.9 million lei. Total revenues amounted to 5.5 billion lei, of which interest income represented 60.6% or 3.3 billion lei and non-interest income had a share of 39.4%, which represented 2.2 billion lei. At the same time, total expenses amounted to 3.7 billion lei, including interest expenses - 27.8% of total expenses (1 billion lei), and non-interest expenses - 72.2% (2.7 billion lei).
● WEDNESDAY, November 27
Anatol Usatîi: Moldova meets conditions for obtaining loans and grants from abroad
The Republic of Moldova meets all the conditions for obtaining loans and grants from the development partners. The statement belongs to the Minister of Economy and Infrastructure, Anatol Usatîi, and was made on Moldova 1 public television station. According to him, discussions are being held with the development partners, as well as with certain states that could contribute financially to the development of the infrastructure, without which it is not possible to achieve economic growth. Anatol Usatîi maintains that negotiations with the Russian Federation for obtaining the $ 500-million credit have already been launched. Talks are also ongoing with the development partners: the European Bank for Reconstruction and Development, the European Investment Bank, the European Commission.
$ 500-million loan from Russia raises questions to which there is no answer, expert
The $ 500 million loan that the Republic of Moldova could obtain from the Russian Federation, which was announced by Prime Minister Ion Chicu and President Igor Dodon, could increase the country's external debt by one third. The statement belongs to economic expert Veaceslav Negruța. According to him, the announcement regarding this credit generates a number of questions to which there is not yet a clear answer on the part of authorities. Veaceslav Negruța states that currently the external debt of the Republic of Moldova is of 1.6 billion dollars. And with the eventual obtaining of the $ 500 million loan from Russia, the country can turn into an area with a very high degree of indebtedness.
Google, Facebook and other non-residents will be required to register in Moldova
International companies providing electronic services for natural persons, such as Facebook, Google and other non-residents who's applications are used on the territory of the Republic of Moldova, will be required to register with the State Tax Service. Additionally, the electronic service providers will be required to pay VAT for these services. The 2020 draft budgetary-fiscal policy contains provisions in this regard. According to the Secretary of State of the Ministry of Finance, Dorel Noroc, the obligation to register and apply VAT for electronic services provided by non-resident economic agents to the population will generate additional revenue to the budget. According to estimtes, revenues will total about one hundred million lei.
Government approved draft Law on 2020 state budget
The government approved the draft Law on the 2020 state budget. The document provides 44.1 billion lei revenues and 51.5 billion lei expenditures. The deficit exceeds 7 billion lei. The budget expects a 3.8% economic growth, an average annual inflation of 5.7%, a 9% increase of exports and an increase of imports of 7.1%. The Minister of Finance, Sergiu Pușcuța, explained that the difference between incomes and expenses will occur due to the launch of new social protection programs. The government has already approved a bill which provides for aid increase for the cold period of the year and another bill which grants a single support payment of 700 lei to beneficiaries of state pensions and social allowances that do not exceed 2000 lei per month. Moreover, the programs in force, such as the "First House", subsidies in the field of agriculture and in the field of regional development and energy efficiency, will continue to be provided.
A map of natural resources of Moldova has been launched
In the Republic of Moldova there are over 400 mines, quarries and mineral deposits authorized for extraction and over 300 unauthorized. The information about the authorized ones can be viewed on resurseminerale.site, while the list of the illegal ones, for which records are kept by the Environmental Protection Inspectorate, could be accessed on the same site in the near future. The interactive map of the mineral resources of the Republic of Moldova was launched by Expert-Group. Iurie Morcotîlo, an economist at Expert-Grup, has mentioned at a news conference that this is the first digital resource in the country that locates mines, quarries and provides general information about them. The map aims to improve the transparency of the use of mineral resources. According to the economist, there are many cases of unlawful extractions, both from authorized places and from unauthorized spaces.
● THURSDAY, November 28
Sergiu Pușcuța: 100% of individual tax will go to local budgets
In recent years, the situation in Molodva regarding local public funds has continued to evolve and steps are being taken to make the management of public funds more effective. This was stated by Sergiu Pușcuța, Deputy Prime Minister and Minister of Finance, during a meeting with rapporteurs from the Council of Europe’s Congress of Local and Regional Authorities who are on a post-monitoring visit to Chisinau. According to a press release from the Moldovan Congress of Local Public Authorities, Sergiu Pușcuța considers as an achievement that in recent years the way of forming local budgets has been changed, which aims to strengthen the financial autonomy of local authorities. Consequently, there are no longer financial relations of subordination between the administrative-territorial units of first and second level. Political participation in making transfers from the state budget to the local budget has also been minimized.
Zinaida Greceanîi: Large part of 2020 budget will be dedicated to investments
Parliament Speaker Zinaida Greceanîi, the leader of the Socialist Party, said that the three budgets must be approved by the end of December. The deadlines were violated because the bills had to be introduced to Parliament by October 15. Moreover, Zinaida Greceanîi said that a large part of the 2020 budget will be dedicated to infrastructure investments. The Speaker of Parliament said that funds designated for investments account for more than one billion lei. "We will create jobs in the field of infrastructure. In addition to investments, this budget bill also targets the social field. The indexation of pensions twice per year is planned, while allowances for the winter holidays will be issued to more than 600 thousand pensioners", said the socialist.
Budget for 2020 has electoral overtones, opinions
The budget for 2020, which has been approved yesterday by the Government and is due to be debated in Parliament, has electoral overtones. This is the opinion of MP Lilian Carp. According to him, the budget allows for a very large budget deficit, but it is not yet known how it will be covered. MP Lilian Carp maintains that the approved budget has, on the one hand, an electoral intent, and, on the other hand, behind this social budget screen there could occur certain frauds through privatizations that raise many questions. "It is a budget that does not differ much from the 2019 budget, which had a deficit of over five billion lei," says the parliamentarian.
Walnut plums registered as traditional speciality guaranteed
Eight geographical indications and three designations of origin are registered in the Republic of Moldova. Recently, a traditional specialty was also registered - plums filled with walnut kernels. The Parliamentary Committee for agriculture and food industry held hearings on the implementation of the Law on protection of geographical indications, denominations of origin and traditional speciality guaranteed.
Burden on Agricultural Subsidy Fund increases every year, hearings
Burden on the Agricultural Subsidy Fund increases every year. The 950 million lei provided per year in recent times, does not cover the needs of the agricultural sector. In 2020, although the forecast amount remains the same, between 100 and 200 million lei will be available to support farmers. The rest of the amount is either debt or fixed-term financing.
Farmers are in for a difficult situation in terms of access to subsidies, MP
MP of DA Platform group ACUM Bloc, Alexandru Slusari, Deputy Speaker of the Parliament, says that next year a very complicated situation is expected as regards the financing of the agricultural sector. At a press briefing, the MP warned that the Agricultural Subsidy Fund for 2020 remains at the level of 2017, of 950 million lei, but the arrears for 2019 will come to over 600 million.
Voice traffic on mobile networks has increased slightly
In the first nine months of this year, the market for mobile services was marked by a slight increase in voice traffic on mobile networks. Voice traffic reached 4.6 billion minutes, IPN quoted a National Regulatory Agency for Electronic Communications and Information Technology (ANRCETI) press release. According to the press release, the volume of sales made by suppliers decreased by 2.3% and totaled 2.3 billion lei, while the total number of subscribers decreased, compared to the end of 2018, by 1.7% and made up 4.3 million.
A travel guide in Italian will present Moldova’s tourism offer
A travel guide in Italian, presenting the tourism offer of Moldova, will be launched in 2020. It is a first experience of this kind, the guide being developed by the travel publishing house in Italy - Touring Club Italiano. The National Inbound Tourism Association of Moldova states in a press release that since 2016, when the tourism promotion program #FiiOaspeteleNostru- #BeOurGuest was launched, the number of tourists from Italy has increased by 26%, contributing to the development of the tourism industry in Moldova.
● FRIDAY, November 29
Finance Minister shows how 7.4 billion budget deficit for 2020 will be covered
Deputy Prime Minister, Finance Minister Sergiu Pușcuța, says that the budget deficit of 7.4 billion lei, provided in the draft state budget law, which has been recently approved by the Government and is to be debated in Parliament, will be covered by both internal resources and external financing. The minister claims that the direct difference between revenues and spending is of 2.6 billion out of the total amount of 7.4 billion-deficit. The other part, of 4.8 billion lei refers to the investment component, which, according to Sergiu Pușcuța," is not a deficit that would create a serious danger for the sustainability of the budget", IPN reports.
World Bank forecasts 3.6% economic growth for Moldova
The economy is projected to grow by 3.6 percent in 2020 and by 3.8 percent in 2021 as growth in Moldova’s main trade partners strengthens. The forecast assumes continued progress on the reform agenda, including on containing fiscal pressures, says "Moldova Economic Update, Fall 2019", published by the World Bank in Moldova on Thursday, November 28. The same data show that the outlook for the Moldovan economy remains positive, but downside risks are increasing. Prudent fiscal and financial sector policies are critical to protect macroeconomic sustainability, while low productivity and a judicial reform require immediate efforts.
Two more banks accepted in "Livada Moldovei" Program
Horticultural producers participating in the "Livada Moldovei"/”Moldova’s Orchard” Program will be able to access loans under preferential conditions in other two banks, in addition to the five banks involved in the program. Victoriabank and Moldova Agroindbank were accepted by a decision of the Ministry of Finance and the Directorate for the credit line of the European Investment Bank. At a press conference, the Minister of Agriculture, Regional Development and the Environment, Ion Perju, stated that through the respective banks horticultural producers would be able to benefit from the credit line of the European Investment Bank. It is a credit line of 120 million euros.
Number of apartments put in operation, on the rise compared to last year
In the first nine months of the year, more than 6500 apartments and individual dwellings were put into operation, by 58% more than in the same period last year. The National Bureau of Statistics informs that in the urban area, nearly 6000 apartments were put into operation. Asked by IPN, the director of Cvartal Imobil company, Victor Cornea, has commented that the tendency to increase the number of individual houses or apartments put into operation during the period January-September is explained by the high demand. The political situation in the country has stabilized, and people have gained more confidence in the made investments, said Victor Cornea. Also, maintains the director of the company, more and more people want to move from old blocks into new ones.
● SATURDAY, November 30
Only one international airport in the country represents a monopoly element, Prime Minister
The existence of a single international airport in the Republic of Moldova is an element of monopoly, whereas the development of new international airports will create conditions for competitiveness in the field. It will also give passengers the opportunity to choose and, as a result, will reduce ticket prices and aviation services tariffs. The statements were made by Prime Minister Ion Chicu, who convened a meeting to examine the opportunities for developing airport infrastructure in the Republic of Moldova. The prime minister said that the decision to develop the airport infrastructure in the Republic of Moldova would be taken only after completing a feasibility study which would outline the economic reasoning. Further, the Prime Minister asked to be set up a working group, headed by the Minister of Economy, who would identify the ways of carrying out the above-mentioned feasibility study.
Moldovan Agriculture must be modernized, Prime Minister
Agriculture in the Republic of Moldova needs to be modernized. The model of selling primary production, straight from the fields, is outdated. It is necessary to strengthen the processing-consumption chain. The statement belongs to Prime Minister Ion Chicu, and was made during the festive ceremony dedicated to the Agriculture and Processing Industry Workers’ Day. According to Ion Chicu, domestic production has to be found more often on the shelves of sales outlets in the country, so as not to import so much anymore. For this, it is necessary to modernize, technologize, subsidize processing enterprises, and also to provide tax incentives to create added value. According to the bill, projects need to be identified to attract young people into agriculture and to develop new products.
