The Moldovan economy is in recession. The risks anticipated in summer materialized. These include the banking crisis, deterioration in relations with the development partners, reduction in exports and remittances, two-digit inflation, executive director of the independent think tank “Expert-Grup” Adrian Lupusor told a news conference.

Among the sectors that positively influenced the economic developments are industry (+3.1%) and foreign trade (+2.3%), while agriculture declined (-12.6%). According to “Expert-Grup”, the economic recession of this year could have been more severe if the national currency hadn’t depreciated. The depreciation influenced positively exports and reduced the balance-of-trade deficit.

The national economy turned out to be unprepared for the current crisis: the budget deficit is on the rise and is estimated to represent 3% of the GDP for 2015; the currency exchange reserves reached a low level, close to the admissible minimum, while the banking sector became weak following the bankruptcy of the three banks.

The institutions that must immediately intervene to stabilize the macroeconomic situation are either paralyzed by the political crisis or do not have technical and financial resources. Thus, in the absence of a functional government, the reformation process was blocked, while the budget for next year hasn’t been yet approved. Owing to the management crisis at the National Bank, the negotiation of a new memorandum with the IMF, which can facilitate the access to external financial recourses, is impossible, stated Adrian Lupusor.

“Expert- Grup” considers that 2015 showed again that the consumption- and remittance-based economic growth model is no longer functional. “The internal consumption that is powerfully dependent on remittances cannot ensure balanced economic growth to which we should tend. To change this status quo, the policies in all the areas - fiscal, industrial, monetary and commercial - should be coordinated so as to ensure healthy internal demand, monetary stability and an improvement in the investment climate, which would together lead to the structural transformation of our economy,” added the expert.

For 2016, “Expert- Grup” forecast an economic growth of 2.9%, but the experts anticipate the recovery will be difficult and slow.