WB official forecasts 5% GDP rise for 2007

World Bank Country Director for Ukraine, Belarus and Moldova Paul Bermingham forecasts a 5 percent rise in Moldova’s Gross Domestic Product (GDP) for 2007. The WB official told Tuesday, May 15, a news conference that this growth rate is fairly high by European and global standards. However, it would have been higher had it not been for the external shocks on the wine-making sector and the increases in gas prices. “The situation seems to be better this year, yet it could become unstable in the long run; therefore there is a need for concrete actions on the part of the Government and other Moldovan authorities for setting up a stronger platform to attain a sustainable economic growth”, the WB official said. In his words, the economic growth remains vulnerable as the external climate continues to be rather favourable, given the large amounts of remittances that enter the country. “The opportunity to ground the economic growth on remittances is limited and the medium- and long-term challenge is to reduce this dependence to attain higher levels of economic growth”. In the context, the official mentioned the need for implementing new economic reforms designed to improve the business climate and to encourage the entrepreneurial activity. Bermingham said the Moldovan authorities have achieved progress in managing public expenditures in the last few years, also achieving progress in areas of economic growth and poverty reduction. “The main challenge that the country confronts with at present is to find ways to maintain these levels of growth in the medium- and long-run and to make these growth-triggering factors surpass remittances, so that the country could lose dependence on export of labour from Moldova”, the WB official said. These issues will form the key part of the discussions between WB officials, the Government and development partners on the new Country Assistance Strategy for Moldova. One of the main goals of the Strategy addresses the country’s economic growth and its sustainability, competitiveness and the future of young people in Moldova, Bermingham said. The World Bank Director for Ukraine, Moldova and Belarus, Paul Bermingham, is visiting Chisinau during May 14-16, 2007. The objective of the visit is to formally introduce the in-coming World Bank Country Manager to Moldovan officials. Paul Bermingham is also taking this opportunity to further discussions on ongoing World Bank assistance to Moldova and to assess with the authorities progress in the implementation of Bank-financed operations.