2008-2010 official preliminary macroeconomic outlook forecasts 5% GDP annual increase

The official preliminary macroeconomic outlook for 2008-2010 shows a 5% annual increase in real terms in the Gross Domestic Product (GDP), a 5.5% decrease in the inflation rate until 2010, the slow underrating of the national currency exchange rate against the US dollar, and resumption of exports. According to the strategy for mid-term expenses, approved by the Parliament on Friday, July 6, the country’s average monthly salary is to be raised by about 17% yearly, to reach 3250 lei in 2010. The fiscal policy terms proposed for 2008-2010 are aimed at supporting the people on low income, gradually shifting the tax burden on the population with average income and higher then average income, expanding the taxable income, as well as at improving the business climate and boosting both local and foreign investments. In 2008-2009 the social insurance share will keep its present level of 29% from the work payment fund by further redistributing the share between the employer and the employee. In 2008 the employer will pay 24% and the employee – 5%. In order to expand the package of medical services offered to the population through the compulsory medical insurances, in 2008-2009 the compulsory medical insurance premium will increase from 5% in 2007 to 6% in 2008 and 7% in 2009-2010, being equally shared between the employer and the employee. Starting 2008, a system is to be implemented for returning the value added taxes pertaining to goods, services related to long-term capital expenses (except for those on rent and transport means), occurring countrywide, except Chisinau and Balti. In 2008-2010, the increase in the public expenses is to slow down as compared to the previous years. In 2007-2010 the expenses of the national public budget will go up from 20.9 billion lei in 2007 to 27.2 billion lei in 2010. Also, the share of the GDP national public budget is to diminish. The budgetary deficit is estimated at 0.5% of the GDP and will be preponderantly covered from the available resources. Foreign credits and grants will be used to assist public investment projects. The expense priorities for 2008-2010 are for raising wages in the budgetary sector, supplementing the transfers to the territorial-administrative budgetary units and other budgets. The highest fund increases are foreseen for the social expenses. By 2010 the social expenses will go up by 1.5 times and will reach a level of 28.1% of the GDP or about 70% of the total volume of the national public budget expenses. In what concerns social expenses, the highest increase will be registered in healthcare and social assistance, preponderantly from the expenses of the compulsory medical insurance funds and the state social insurance budget. In the next years, the allocations for the capital expenses will increase in the economic infrastructure, especially for road management, water supply and sewerage.