“The Economic Monitor” reveals crisis situation in most of national economy sectors

The introduction of zero rate tax on income for the legal entities will add an average MDL 200 mln to the State Budget, economic expert of IDIS “Viitorul” Veaceslav Ionita said during the launch of the 10th issue of “The Economic Monitor: quarterly analyses and forecasts”. According to Ionita, the current issue reveals a crisis which has extended to the majority of vital sectors of the national economy. “The industry has registered in the first quarter of 2007 several increases which where rapidly annihilated by the lack of financial means. Although the first positive trends were registered in the area of foreign trade, the trade balance deficit will exceed USD 2 bln this year. The EU and Russian markets will account for export increases”, Ionita mentioned. He said that “the foreign investments come very slowly, and in 2007 their volume, in the most optimistic variant, will be similar to that of 2006. Moreover, this year the MDL has become stronger against the USD by 6%, down to MDL 12.34 from MDL 13.04. Owing to this situation, NBM has acquired a huge sum amounting to USD 80 mln. The MDL will continue to grow, reaching MDL 12.2 at the end of this year. For his part, expert in agriculture of IDIS “Viitorul” Viorel Chivriga said that “in agriculture, the output and productivity registered the poorest results in the last ten years, affecting the population living in villages, as well as that living in towns and cities as a result of the increase in prices of the main farm products. An improvement should be brought about by the Law on the establishment of markets for agricultural and agrifood products, which will favour the creation and functioning of rural market, the expert says. According to the cited source, the long-term credits are more and more popular, especially those provided in foreign currencies. “The Economic Monitor” forecasts that the rate of the interest will decrease to the level of 18%. A negative aspect is the decrease in the collected VAT, which was the main source of the budgetary incomes. The officially declared inflation rate of 12% will in fact reach 13.3% at least. The process will be worsened by the increase in price of energy resources. The Monitor says that the economy of Transnistria continues to remain vulnerable to political and economic disputes occurring in the neighbouring countries. The largest exporting companies were sold to Russia and private companies. The foreign debts of the so-called Moldovan Transnistrian Republic amount to 3 GDPs of the region and 10 annual budgets. “The Economic Monitor” is worked out by the Centre for Economic Policies of the Institute for Development and Social Initiatives “Viitorul”. The publication shows the state of affairs of the political, economic and social life, providing recommendations and perspectives on the further development of Moldova.