Moldova
We have revised the 2021 growth forecast to 7% (from 4%), assuming that there is no severe lockdown and agriculture recovers from last year’s slump. Inflation may reach 4.5% by the end of the year, triggering a modest rise in the base rate. Improved external conditions – especially a strong recovery in Romania – may boost the economy in the future. Moldova is set to receive a EUR 600m economic recovery package from the EU in the form of aid and credit over a three-year period, conditional on judicial and anti-corruption reforms. If the pro-EU forces win the snap elections scheduled for 11 July, Moldova could finally find an anchor in the West, but retaliation from Russia may prove a challenge.
| FORECAST* | ||||||
|---|---|---|---|---|---|---|
| Main Economic Indicators | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
| Population, 1000 persons | 2708 | 2665 | 2620 | . | . | . |
| GDP, real change in % | 4.3 | 3.7 | -7.0 | 7.0 | 4.5 | 4.0 |
| GDP per capita (EUR at PPP) | 8590 | 9130 | 8770 | . | . | . |
| Gross industrial production, real change in % | 3.7 | 2.0 | -5.5 | . | . | . |
| Unemployment rate - LFS, in %, average | 3.6 | 5.1 | 3.8 | 4.0 | 3.5 | 3.0 |
| Average gross monthly wages, EUR | 316 | 368 | 402 | . | . | . |
| Consumer prices, % p.a. | 2.9 | 4.8 | 3.8 | 3.6 | 4.2 | 4.5 |
| Fiscal balance in % of GDP | -0.8 | -1.4 | -8.5 | -5.0 | -4.0 | -3.0 |
| Public debt in % of GDP | 27.2 | 25.1 | 33.1 | . | . | . |
| Current account in % of GDP | -10.4 | -9.3 | -6.7 | -8.5 | -8.4 | -8.0 |
| FDI inflow, EUR m | 244 | 448 | 55 | . | . | . |
| Gross external debt in % of GDP | 66.3 | 62.0 | 65.2 | . | . | . |
Basic data are continuously updated.
* Forecasts are changed beginning of April, July and November.
See Press Conferences.
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Monthly Report No. 7-8/2021
Vasily Astrov, Alexandra Bykova, Rumen Dobrinsky, Selena Duraković, Richard Grieveson, Doris Hanzl-Weiss, Gabor Hunya, Branimir Jovanovic, Niko Korpar, Sebastian Leitner, Isilda Mara, Olga Pindyuk, Leon Podkaminer, Sandor Richter, Bernd Christoph Ströhm and Maryna Tverdostup
wiiw Monthly Report No. 7-8, July-August 2021
42 pages including 4 Tables and 15 Figures
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MOLDOVA: Cumbersome recovery from deep recession
Gabor Hunya
in: Darkest before the dawn?
wiiw Forecast Report No. Spring 2021, April 2021 , pp. 94-97
Details and Buy
In Q1 2021, GDP grew by 1.8% to exceed the 2020 level and compensate for the major COVID-related setback. The economy gained momentum, despite the continuing COVID-related restrictions. Manufacturing production rose by 3% and construction output by 8% year on year. Wages were 10% up in real terms, while employment maintained its 2020 level. An expansion of over 14% in gross fixed capital formation supported GDP growth. The trade deficit widened in Q1 after a temporary contraction last year. In more recent months, the COVID-19 infection rate has declined, despite sluggish vaccination. We have revised the 2021 growth forecast to 7% (from 4%), assuming that there is no severe lockdown and agriculture recovers from last year’s slump. Inflation may reach 4.5% by the end of the year, triggering a modest rise in the base rate. Improved external conditions – especially a strong recovery in Romania – may boost the economy in the future. Moldova is set to receive a EUR 600m economic recovery package from the EU in the form of aid and credit over a three-year period, conditional on judicial and anti-corruption reforms. If the pro-EU forces win the snap elections scheduled for 11 July, Moldova could finally find an anchor in the West, but retaliation from Russia may prove a challenge.