MEC has moderate expectations for this year’s economic growth

The Ministry of Economy and Trade projects the Gross Domestic Product (GDP) to grow 6 percent this year and expects a 4 percent growth for last year. Minister Igor Dodon told reporters that the forecast made by the Ministry is more cautions than the World Bank’s – 8.6%. In fact, all the economic forecasts that the Ministry has made for 2008 were called by Dodon ‘conservative’, because they indicate the lowest growth rate expected for all indexes, except inflation. Dodon stated that the goal for this year is to keep inflation at no more than 10 percent. According to him, the impact of last summer’s drought was a 5 percent subtraction from GDP growth, with nine-month GDP value reaching 40.3 billion lei, a 3.3 percent rise compared with the corresponding index in 2006. Igor Dodon said that in 2007 the main source for GDP growth were investments. In nine months alone, investment in fixed capital amounted to about 7.5 billion lei, which is a 28.7 percent increase against the corresponding period of 2006. At the same time, foreign direct investment saw a record rise of almost 200 percent to stand at nearly 450 million US dollars in nine moths of 2007. This surge was mainly due to Moldova’s proximity to the European Union and a rising interest in the banking sector. For this year, MEC forecasts an increase of 20 percent in investment in fixed capital and of 50 percent in FDI.