ECO-BUS WEEKLY DIGEST December 16-22. Most important Economy & Business news by IPN
● MONDAY, December 16
About 90 kiosks celling cigarettes in Chisinau removed during a week
Approximately 90 kiosks selling tobacco products near education and health institutions in Chisinau were taken away in the course of last week. In the December 16 meeting of officials of Chisinau services and divisions, district heads said some of the kiosks didn’t have cigarettes on sale, but the buyers could purchase some from these on request. A number of companies that own kiosks complied with local authorities’ demands and withdrew the tobacco products from sale.
Gas Natural Fenosa Furnizare Energie turns into Premier Energy
The electric power supply company ÎCS “Gas Natural Fenosa Furnizare Energie” SRL is changing its image with a new trademark and name – “Premier Energy”. In a press release, the supplier says this transformation that is focused on modernization and innovation signifies a new stage in the company’s history. “Premier Energy” is a new brand name for the Republic of Moldova, but is known in Romania, where it represents an important natural gas distribution and supply company. During the last 20 years, the electric power supply and distribution companies invested over €287 million in the renovation and modernization of Moldova’s electricity networks.
25 tourist guides get certificates on high quality standards
A number of 25 tourist guides of Moldova on December 16 received certificates of participation in courses accredited by the World Federation of Tourist Guide Associations, which is one of the most important documents confirming that high quality standards are met in the field. There are almost 150 tour guides in Moldova at present. The first class of 24 guides received certificates of participation in courses accredited by the World Federation of Tourist Guide Associations in March. In 2018, Moldova was visited by about 160,000 tourists from such countries as Germany, Poland, Italy, the UK, the U.S. and Romania.
● TUESDAY, December 17
List of goods exported to Russia duty-free to be extended
Five more categories of products will be added to the list of goods that will be exported to the Russian Federation duty free as of January 1, 2020. The given products include beef, sunflower seeds, sugar, ethyl alcohol and furniture. According to a posting placed by President Igor Dodon on Facebook, such an agreement was reached by Minister of Agriculture, Regional Development Ion Perju, co-chairman of the Moldovan-Russian intergovernmental commission for commercial-economic cooperation, with the commission’s co-chairman on behalf of Russia Dmitry Patrushev in a meeting in Moscow. The export duties have been so far abolished for fresh vegetables, apples, plums and quinces, canned apricots, cherries and vegetables and wines.
Amendments to gas supply contract will be signed by next week
Moldovagaz will sign amendments to the contract for the supply of natural gas during the next three years with Gazprom by next week. The president of the Administration Board of Moldovagaz Vadim Ceban told a news conference that no essential changes will be made in the contract. The formula for setting the purchase price of natural gas remained the same. The price will be determined quarterly. As it was preliminarily calculated, the annual average price will be US$173-175 per 1,000 cubic meter of gas.
Losses caused by climate change estimated at about US$ 600m a year
The non-adjustment to clime change phenomena, such as droughts, forests, torrential rain, hail and high winds that become something usual is the biggest challenge for the agricultural sector. In the Republic of Moldova, the losses caused by climate change are estimated at about US$ 600 million a year, Liviu Gumovshi, director general of the Consolidated Agricultural Projects Management Unit, stated in an event entitled “Dialog Pro-Business” that involved senior state officials. Liviu Gumovshi noted that short-term measures are needed, such as the allocation of sufficient financing for the special services responsible for the monitoring of hydrometeorological processes and using of subsidized agricultural insurance.
Measures to ensure country’s energy security
The Government approved the ratification of the financial assistance agreement for the purchase of natural gas between Moldova and the EBRD that was signed on December 11. The draft decision will be submitted to Parliament for adoption. By this agreement, the EBRD undertook to offer Moldova money for the purchase of a quantity of natural gas if the negotiations on the transportation of Russian gas through Ukraine to the countries of Southeastern Europe are not closed by January 1, 2020.
● WEDNESDAY, December 18
Gross Domestic Product 4.3% up in third quarter
The Gross Domestic Product in the third quarter of this year was 64.323 billion lei in current market prices, a 4.3% increase in real terms compared with the corresponding period last year, IPN has learned from the National Bureau of Statistics. Wholesale and retail trade, overhaul of motor vehicles, public food and accommodation, agriculture, forestry, fishing, building sector, extractive industry and processing industry contributed to the GDP growth in the period. The taxes on products made a contribution of almost 12% to the formation of the GDP.
● THURSDAY, December 19
Electoral character of budget deficit will have repercussions for economic growth
The adoption of the 2020 state budget generated polemics and concerns given the expansionist character of the investment programs and the high budget deficit in an electoral context and following the relaxation of the monetary policy. The electoral character of the planned deficit could have repercussions for the stability of public finances and the economic growth in the medium and long terms, says the publication “Economic Reality: top ten economic events of 2019 and top ten challenges for 2020” produced by the Independent Think Tank “Expert-Grup”. According to the experts, a more attentive analysis of the 2020 state budget law shows that only 10% of the fiscal space is intended for new policy measures, while 90% contribute to the implementation of the policy measures undertaken the previous years. The main policy measures of the 2020 draft budget envision the extension of the local financial autonomy by increasing deductions from the tax returns of private individuals and raising the territories support fund by 10% of the income tax paid by entrepreneurs.
Political and economic instability determined limitation of investment, “Expert-Grup”
The political and economic instability in Moldova in the recent past determined a restrained investment behavior. Even if the direct investment flows into the national economy in the second quarter of the year trebled, these benefitted a limited number of companies, mainly from the agricultural products cultivation and distribution sector and the banking sector, said experts of the Independent Think-Tank “Expert-Grup”. “At regional level, the Republic of Moldova is a loser in the investment attraction race. This shows the shortcomings existing in the business sector of the country haven’t been systemically addressed in time. This is confirmed by the Republic of Moldova’s modest scores in international rankings that characterize our country’s economic situation and its attractiveness to investors,” says the publication “Economic Reality: top ten economic events of 2019 and top ten challenges for 2020”.
Welfare of population can be negatively affected during next few years, experts
The people’s welfare during the next few years can be negatively affected by the stagnation of the foreign sources of income, transfers from abroad, and the domestic ones, salaries. The diminution of the transfers from abroad in 2019 can mean the attainment of a growth limit for this source of income that is caused by the exhaustion of the human resources involved in migration processes, experts of the Independent Think Tank “Expert-Grup” say in a publication entitled “Economic Reality: top ten economic events of 2019 and top ten challenges for 2020”. According to the experts, the slowdown of the economies where Moldovan migrants work is a factor that can negatively affect the transfers from abroad next year. The record pay rise paces in 2018 and 2019 can be tempered owing to the budgetary constraints and the slower labor productivity growth. This risk to salaries is rather a medium-term one as additional sources can be used in 2020 to stimulate the rise in pays.
2020 state budget law adopted
Parliament gave the second, final reading to the state budget law for 2020. Of the 131 amendments proposed after the first reading, 63 were accepted. The general indicators of the state budget remained unchanged. The revenues will come to 44.136,6 billion lei, while the expenditure to 51.551,9 billion lei. The state budget deficit was projected at 7.415,3 billion lei. As many as 56 of the attending 77 MPs voted in favor. The deficit will be financed with loans provided for implementing projects that are financed with foreign funds and in budget support, with issues of state securities and stocks and with the account balance of the component budgets of the national public budget.
Investigation of bank fraud is politically motivated, “Expert-Grup”
After over five years of the commission of frauds in the banking sector, public opinion does not yet have clear answers as to what happened then and who is to blame. Even if a number of investigations were conducted, recover strategies were worked out and parliamentary commissions of inquiry were constituted, the result is the same – there are more questions than answers. It is yet clear that the frauds and the investigation process were and continue to be politically motivated and are a too difficult test for the justice system, says the publication “Economic Reality: top ten economic events of 2019 and top ten challenges for 2020” produced by the Independent Think Tank “Expert-Grup”. According to the experts, the investigation of the bank fraud remains a case of increased interest for society and a major challenge for the authorities, especially because the agreement with the IMF, which kept this commitment alive, expires next March. With the passing of time, the chances of recovering the stolen funds decrease and the burden on the Ministry of Finance, which has to use taxpayers’ money as well to repay the debt to the National Bank of Moldova, increases.
Number of subscribers to IPTV services 9.5% up
The number of subscribers to IPTV services in January – September 2019 rose by 9.5% compared with the end of 2018 to almost 175,000 clients. The national ICT regulator (ANRCETI) said the revenues from the sale of these services increased by 13.3% compared with the same period last year to over 65 million lei. Currently, 47.1% of the Moldovans are connected to the cable TV network, 52.8% to the IPTV network, while 0.1% to the MMDS network. The number of subscribers to pay TV services in the first nine months of this year grew by 0.1% compared with the end of 2018 to about 330,000. Sales on the given segment of the market diminished by 0.3% to 118.9 million lei. Each third citizen receives the TV signal in an analog format, while the rest in a digital format.
● SATURDAY, December 21
Ion Chicu: Mărculești airport will start to work by next June
Prime Minister Ion Chicu said the state will invest in the airport in Mărculești so that this could start to work by next June. Up to 30 million lei is needed for the purpose. He noted the airport is generally functional and has all the necessary airport certificates. “We made an analysis and saw how many citizens of ours fly from the Iasi airport. These are mainly from northern Moldova. Furthermore, there are regions in Ukraine that are close to Bălți town, such as Vinița, Cernăuți”. The official said the first analysis of the Mărculești and Bălți airports was carried out. From commercial viewpoint, the airport in Bălți is more attractive as there are many localities close to it. But very large investments need to be made there.
