Increase in price of natural gas to influence pace of economic growth

The experts of the International Monetary Fund (IMF) foresee a slight reduction of the pace of economic growth in Moldova for 2006 and 2007 which will also influence the rate of inflation. These phenomena are caused by the increase in price of natural gas. Thomas Richardson, the head of IMF Mission, who visited Moldova during July 12-21, said that this fact will not generate serious changes of the macroeconomic framework. Although an increase by 1.5 – 2% of the rate of inflation was registered, this percentage is included in the previous estimations of IMF, which took into consideration the possible secondary effects on the economy of the Republic of Moldova. Both the increase in price of natural gas and halting the exports of wine production are significant shocks, but the country’s economy has the necessary capacities and reserves in order to adjust to these external shocks, Richardson believes. Compared with Ukraine, the impact of the price increase in Moldova will be painful only for some private persons and not for the national economy. Of course it is very important in this situation to give compensations to poor persons so that they could cope with this situation, the IMF official considers. Deputy Prime-Minister Zinaida Grecianai, confirmed the estimations of IMF but she mentioned that a definitive estimation of the Government will be presented in October within the discussions with the next IMF Mission.