Experts pessimistic on Moldova’s economic state

Independent experts have rather pessimistic forecasts in what concerns the economic evolution of the R. of Moldova., The deficit of the trade balance is expected to exceed USD 1.6 bln by the end of the year, economist Veaceslav Ionita said, on the occasion of launching “The Economic Monitor” for the 3rd trimester of this year. According to him, political authorities of the R. of Moldova lack at present adequate resources and instruments for reducing the trade gap. If imports exceeded exports at an extent of 50% in 2005, this fact being considered an enormous failure, then this year the figure of 40% will be labeled a great success, Ionita claims. Moreover, the crisis in the economic relations with Russia emphasized the internal handicap of the R. of Moldova, specifically the incapacity of public authorities and economic environment to team up for overcoming this crisis. The analyst thinks that, for the first time since the economic crisis in 1998, foreign trade will register a decrease of over 5%. Imports will continue to climb, to a certain extent because of the increase in imported products, considered till recently traditional local products. Thus, one can assume that we witness a massive substitution of local goods with imported ones. Independent forecasts attest that the basic income of the state budget in 2006 will total MDL 9.75 bln, or by 380 mln less than the Government’s expectations. On the other hand, the real expenses of the state budget will be by 8.4% smaller than in 2005. Interest rates for bank credits are expected to go up 20% by the end of the year. Agricultural growth will also be a modest one, not exceeding 2%, and the industrial growth will register negative figures and will mark a 5% decrease compared to 2005. Experts also assert that, due to the uncompetitiveness of the national economy, the tendency of labor force migration will continue to increase, and the number of employees in the national economy will continue to go down.