Poverty phenomenon persistent in Moldova – experts

The phenomenon of poverty persisted in Moldova in the fourth quarter of 2006 and its rate in villages has significantly increased, economic analyst Valeriu Prohnitchi told a press conference on Wednesday, January 31 at the launching of the fifth issue of “Euromonitor” magazine. According to the analyst, the poverty was determined by the agricultural stagnation and the bans Russia imposed on food products and wine, Info-Prim Neo reports. Prohnitchi says that the observation of the process concerning the economic and social reforms found that the growth pace of the economy has reduced compared with the similar period of 2005, being determined by the regress in the industrial sector and the stagnation of agriculture. Moreover, the Gross Value Added in the entire economy went up only 3%, while the net production and export taxes by 9%. The combination of such an inert added value and taxes that grow firmly result in a delusive economic achievement, Prohnitchi says. At the same time, the so-called growth of the Gross Domestic Product (GDP) and of the family incomes is due to the remittances wired by the Moldovan citizens working abroad. According to the data provided by the National Bank, the transfers coming from abroad amounted to about USD 765 mln in the first 11 months of 2006. “Such a model of economic growth can reduce poverty on short-term, but it creates long-term social-economic effects, because 25-30% of children live in incomplete families”, Prohnitchi affirms. According to the expert, the average wage continued to grow in the fourth quarter, however it was accompanied by wage debts. They amounted to MDL 130 mln by late November, half of which in agriculture. Referring himself to the economic growth, the analyst stated that its rate diminished both in production and agriculture, but it has significantly increased in the filed of services – by 8.5%. From the point of view of GDP’s use, the amount of investments increased by 30%, the private consumption – by 5.2%. At the same time, the volume of exports increased by 2.5%, while imports went up by 11%. According to Prohnitchi, the reduction of the economic growth in the fourth quarter of 2006 was generated by the annual industrial regress, which constituted 7%, as well as by the increase by only 1% of the agricultural production and decrease of exports by 6% in the first 11 months of the last year.