ECO-BUS WEEKLY DIGEST 21 September 27. Most important Economy & Business news by IPN

● MONDAY, September 21

Several Chișinău companies risk being disconnected from water supply

Several companies in Chișinău risk being disconnected from the water supply network if the wastewater sample results collected between September 14 and 18 prove that they exceed the maximum concentrations of allowed pollutants. The test results will be ready by September 22-23, said the acting director of the water utility ACC Anatolie Lichii during a City Hall meeting. “Our teams are doing their best to inspect companies, day in and day out. Some of them have signed contracts for overloaded water treatment. We talked to everyone and established a chart with the dates when these companies will be disconnected from the water network, if they don't comply. We have an individual approach for each consumer,” said Anatolie Lichii.

MEI: Romania is main importer of Moldovan goods

Romania's imports from the Republic of Moldova have exceeded several times the Russian Federation imports of Moldovan products, according to data from the National Bureau of Statistics for the first seven months of 2020, quoted in a Ministry of Economy and Infrastructure (MEI) press release. The total value of Moldovan exports to the European market over the course of seven months was $893.5 million, which accounts for 64.7% of the total exports, while imports added up to $1.326 billion. The volume of Moldovan exports to Romania equaled $357.05 million during the same period. At the same time, the volume of imports from Romania amounted to $348.73 million. As a result, the Moldova's trade balance with Romania amounted to $8.32 million. Romania has become Moldova's main trading partner, both in terms of export and import. Romania acquired, during the reference period, the largest volume of Moldovan products and occupied the first place in terms of goods supplied to Moldova, said the MEI press release.

European project to support small businesses in rural areas

The European Union will offer Moldova support for the development of small and medium enterprises in rural areas (SMEs), within the new "Support policies for small and medium enterprises in rural areas" program, launched today, September 21. According to a Ministry of Economy and Infrastructure press release, the project will last 29 months and will improve the access of SMEs in rural areas to tools and services for business development. The Secretary General of the Ministry, Lilia Palii, said that the usefulness of the project opportunities are better highlighted in the context of the COVID-19 pandemic, as the rural sector is one of the most affected. "Support policies for the SME sector will limit the pandemic's impact and will strengthen SME resilience", said Lilia Palii at the launch event.

Road tax could be included in fuel excise tax

The road tax could be incorporated into the fuel excise tax starting next year, as proposed in the draft 2021 Budget and Tax Policy. Prime Minister Ion Chicu told reporters on Monday the measure aims to ensure “fairness”, as motorists will pay depending on how much they use the roads. Another measure proposed by the Policy is to reduce VAT on primary agricultural goods and fertilizers to 12%. “We think this is a step towards balancing VAT (…) in sectors such as processing, animal husbandry and so on,” explained Ion Chicu.

● TUESDAY, September 22

Ion Sturza about drought and pandemic: We need to make financial reserves

"Moldovan citizens should not have to worry about food security during the pandemic, in the context of this summer's drought. However, Moldovans must gather some financial reserves", said the former prime minister, currently a businessman, Ion Sturza. "We shouldn't have to worry about food security, because we are not alone in this world and we don't have a closed economy. Food deficit is not an issue. Food will be available; however, it may be more expensive, harder to access and probably of foreign production", said Ion Sturza on a PRO TV talk show. In this context, the former prime minister urged the population to make certain financial reserves. "From the food security point of view, I do not see a problem. Food may be expensive, which is expected in drought conditions. We have to make some financial reserves and to consume less, because very hard times are ahead of us", added Ion Sturza.

Moldovan leu gained 2.5% on US dollar in August

In August, the Moldovan leu on average grew by 2.5% in relation to the US dollar, to 16.6511 USD/MDL, compared with 17.0818 USD/MDL in July. According to the National Bank, the net demand of foreign currencies from businesses in August was covered at a level of 113.7% by the net supply from individuals, compared to 115.2% in July. In monetary value, the net supply of foreign currencies from individuals dropped by $1.7 million (-0.7%), while the net demand from businesses rose by $1.1 million (+0.5%).

Number of registered electric vehicles has quadrupled in 2 years in Moldova

The number of electric cars registered in Moldova has increased, over the course of the last two years, by about four times. In 2014 only 4 electric vehicles were registered. Their number increased to 99 in 2018. Currently, there are 369 registered electric motor vehicles. According to the Public Services Agency, the first electric trucks and tractors were registered in Moldova in 2018. In 2020, there were 11 registered trucks and 12 tractors. The number of electric motorcycles has also increased from one in 2013, to a hundred units in 2020. The most popular imported electric vehicle models are the Nissan Leaf (149), followed by Renault Zoe (65) and Tesla Model 5, S (46). Volkswagen E-Golf electric cars (25) and AIMA motorcycles are also in demand.

No public events to take place during Wine Day

The 19th edition of the National Wine Day will take place this year on October 3 and 4, under the slogan: "Becoming a deVine holiday". Due to the pandemic crisis, no other public events will be organized in the capital's center, other than the official opening ceremony and the award ceremony for wine producers. According to the National Office of Vine and Wine (ONVV) director, Gheorghe Arpentin, following the festive part of the event, organizers will urge customers to visit wineries, buy their favorite wine and celebrate Wine Day with loved ones. A webinar will be held for journalists who write about wine. Additionally, an exhibition of wine bottle labels will be organized in the center of the capital. Special shows will be broadcast on TV and online, dedicated to millennial winemaking traditions, while wineries from all over the country will prepare surprises for their guests.

● WEDNESDAY, September 23

Measures for drought-striken farmers take effect

The measures adopted to help farmers cope with the consequences of the ongoing drought and other natural disasters have taken effect following their publishing in the Official Gazette. The Ministry of Finance said in a press release the refundable amount of VAT has been increased, and for receiving the refund the condition that all salary taxes be paid has been removed. Additionally, the Fiscal Service will have to execute the refund within 15 days instead of 25. The Government will also subsidize the interest on farmers’ loans, in particular the interests payments from 1 May 2020 to 31 December 2020 included.

● THURSDAY, September 24

Daniel Ioniță: Red flags at BNM regarding independent functioning

The Republic of Moldova sees setbacks in the banking sector, with worrying signals coming from the National Bank of Moldova (BNM) and from foreign investors, stated Romania’s Ambassador to Moldova Daniel Ioniță. "I believe that progress was made in the banking system, which had experienced very difficult times. We believed that if there's anything the Filip government will be remembered for, it will be the progress achieved in the banking sector, specifically the stabilization of the financial and banking situation of Moldova, which was severely affected by the famous case of the disappearance of the billion, or billions of dollars", said Daniel Ioniță during a talk show on TVR Moldova. According to the Romanian diplomat, there are clear signals that the banking sector situation is getting worse. These signals are received from both BNM officials and foreign investors.

Avia Invest fined over 31 million lei for abuse of dominant position

The "Avia Invest" SRL company was sanctioned 31.63 million lei by the Competition Council. According to the institution, the fine was applied for abuse of a dominant position on the market for providing access services to infrastructure and airport facilities to ground handling companies, on Chișinău International Airport grounds. According to a Council press release, the investigation was launched based on the complaint of "MGH Ground Handling" SRL, a company that provides ground handling services at Chișinău International Airport. Only two ground handling operators provide services at the airport: "MGH Ground Handling" SRL and "Aeroport Handling" SRL. The complain refers to "Avia Invest's" unfounded submission of additional agreements to extend leases for an unreasonable period of 30 days.

● FRIDAY, September 25

Over US$126m sent to Moldovans from abroad in August

The amounts transferred to private individuals in Moldova through licensed banks this August came to US$126.45 million, an increase of slightly over 27% compared with last August. Transfers from the EU represented 47% of the total, from the CIS 15.1%, while from the rest of the world 37.9%. According to the National Bank of Moldova, transfers from the EU to private individuals this August totaled US$59.42 million, up 29.1% on last August, with the exit of the UK from the EU having an impact on this figure. Compared with the transfers from the EU in August 2019, except for those from the UK, the volume is by 50.4% higher. Transfers from Israel made up 18.7% (US$23.68m), from Italy 14.5% (US$18.29m), from Russia 13.8% (US$17.45m).

Number of salary earners with meal vouchers in August down 10,000

As many as 32,000 salary earners received meal vouchers this August, which is by almost 10,000 persons fewer than last December, when 49,400 employees had such vouchers, says a response provided by the Ministry of Finance. The meal vouchers issued in the course of 2019 came to the value of 329 million lei, while those issued in the first eight months of this year were worth 173,600 lei. A number of 356 employers provide meal vouchers at present. The Ministry of Finance said the nominal value of a meal voucher for a workday deductible for fiscal purposes should range between 35 and 55 lei. Mandatory health insurance premiums and salary income taxes are not calculated from these incomes.

● SATURDAY, September 26

Veaceslav Ioniță: Our country this year obtained lowest volume of foreign grants in its history

For the first time in the history of the Republic of Moldova, our country obtained the lowest volume of foreign grants against the Gross Domestic Product. Moreover, such data weren’t reported even in 2003, when the then President Vladimir Voronin self-isolated the country, economic expert Veaceslav Ioniță stated in the talk show “Emphasis on Today” on TVR Moldova channel. According to the expert, the blame for the delay in signing a new agreement between the Republic of Moldova and the International Monetary Fund is borne by the Government led by Ion Chicu. “As the Government didn’t want or didn’t have the capacity to adopt all the commitments undertaken before the IMF in a reasonable timeframe, the foreign assistance will come by at least one month later. They impatiently expected the Government to ensure the convocation of Parliament and the adoption of laws. The IMF was ready to discuss the subject of the Republic of Moldova in September, but the Republic of Moldova wasn’t ready,” stated Veaceslav Ioniță.

World Bank offers support for firms affected by COVID 19 crisis

The World Bank provides support for firms in Moldova to survive, recover and preserve jobs after the COVID-19 crisis. The COVID-19 pandemic has led to a drastic decline in economic activity in Moldova, with firms and businesses facing serious financial constraints to continuing their activities, paying salaries, and meeting their tax obligations. The World Bank’s assistance package, which restructures the ongoing $15 million Tax Administration Modernization Project, aims to support the Government of Moldova in implementing important tax related mitigation measures to help businesses, quoting a press release of the World Bank. The restructuring will help the Government of Moldova in implementing critical tax relief measures that will support continuity of business operations and sustain employment levels in the context of the COVID-19 pandemic. The program will specifically implement tax-related conditional subsidy programs aimed at both supporting business survival and protecting employment.

Number of card payments on the rise

The card payment indicators in the second quarter of this year remained on an upward trend, the number of cards in circulation rising by 7.6% compared with the corresponding period last year. The number of cashless payments with cards issued in the country grew by 32.5% on the same period of 2019, shows a report by the National Bank of Moldova. The number of active cards remained constant during the last quarters. The social cards are in the category with the highest use rate – 73.4% of all the cards. 62.2% of all the operations with social cards are cashless payment operations, but cash withdrawals by their value represented 79.4% of all the operations. The number and value of domestic cashless payments grew throughout the analyzed period. The growth for the second quarter was of 54.5% by number and of 56.6% by value compared with the second quarter of 2019.