World Bank Experts pessimistic about Economical Growth of the Republic of Moldova

The rise in price of the natural gases, registered by now will slow down the economy by 5% yearly, and decrease of the budgetary deficit. This declaration was made on Thursday, April 20 by the senior economist of the World Bank for Moldova, Lawrence Bouton, at a press conference at Chisinau. According to the quoted source, for 2006, a budgetary deficit of 0, 8% of GDP is forecasted. If the price for natural gasses will grow to 160 USD/1000 c. m., the budgetary deficit will increase to another 0, 5-0,8% of GDP, equivalent to 190-290 million lei. “The impact on poor families could be significant. For protecting them from the shock related to high prices resources that amount to 0,7%-1,7% of GDP or to 260-625 million lei will be needed, states Lawrence Button. At the same time, the WB experts are against offering natural gasses compensations, inclusively because the Government does not have such funds. According to the WB superior specialist in energetic field, Dejan Ostojic, one of the key elements for overcome the crises is improving the energetic efficiency by reducing the energy losses and supporting foreign investments in this area, creating heating-and-power plants etc. The experts consider that there aren’t many alternatives for the diversification of the natural gases import markets. “The energetic security must be tackled through diversification, but regarding the natural gasses there are not many alternatives. There is a project of importing from Central Asia through Turkey, but it can be implemented only in 3 or 4 years. That is the reason why, on short and medium term, Russia remains the single import source”, states Dejan Ostojic. According to him, even if this market will be diversified, the prices for natural gasses will continue to grow anyway, in this manner the structural reforms are unavoidable. The Information of the World Bank regarding the impact of the natural gases upon the economy of the Republic of Moldova has been sent to the Government on April 18; the Government’s reaction is awaited.