The economic contraction of 2022 will be followed this year by a modest growth of 1.8%, the smallest in the region, according to the World Bank’s estimates for Moldova. The WB country manager, Inguna Dobraja, told a financial education podcast that positive growth is already a good thing in itself, and the authorities need to keep uncertainties under control, especially since there is no end in sight for the war in Ukraine.
Plans are needed for all uncertainties, such as preparing for the cold season. Inguna Dobraja says the Government is doing the right thing by assessing its fiscal space to ensure that both households and businesses can get through the next heating season and are prepared for it. In the medium term, this is essential. At the same time, it is very important to keep the focus on the long-term agenda, which is to evaluate business activity, reduce red tape, and make sure that businesses can enter the market.
In the current conditions, when the need for the country to reorient its exports from the east to the west has increased, a network of good roads, a good railway system, access to ports, and functioning airports are needed. All these things require investment. There is a very clear commitment of the community of Moldova’s development partners to help the country meet its investment needs, Inguna Dobraja said.
The WB official went on to note that the Government is implementing instruments to address immediate needs, to support households, to support the Energy Vulnerability Reduction Fund. These are expensive measures, but at the same time more efficient ways can be identified in the medium term of using budget resources. For example, the Government should remain flexible to be able to allocate more resources than planned, but at the same time, it may make sense to review spending, for example, to check whether the procurement system is efficient, especially of goods and services, to pay attention to investment.
