The lack of visible structural reforms in economy can lead to recession in Moldova in 2015, the independent think tank “Expert Grup” says in its monthly publication “Economic Reality”. The Anticipatory Composite Index based on six reference macroeconomic indicators, which is calculated by “Expert-Grup”, last December stood at 87 points, being in decline for the third consecutive month. This shows that the negative pressure on the Moldovan economy continues, IPN reports.
The economic experts said the worsening of the economic situation is determined by factors related both to the supply and demand. A wide range of economic policy measures are needed in this respect. The pressure on the part of the supply derives from the reduced exports to the EU and especially to the CIS. The given involutions were caused by difficult economic conditions in the region, which led to a decline in the foreign demand for Moldovan products, and by the commercial restrictions imposed by Russia. The regression occurred despite the depreciation of the national currency, which should have stimulated exports and supported the substitution of imported products with national ones at least theoretically.
The fact that imports in the fourth quarter of 2014 fell by only 4.7%, while exports by 12.4% compared with the same period of 2013 confirms the acute dependence of the Moldovan economy on imports. As a result, the industrial production volume started to decrease from 12.3% last October to 6.7% last December. The pressure on the part of the demand led to a 30.8% decline in the volume of remittances sent to private individuals from abroad, mainly from Russia.
“Expert-Grup” noted that the slowdown in economic activity, together with the increased demand for foreign currency, caused by a series of suspect transactions, and the amplified nervousness of the population led to the significant deprecation of the national currency. Though the leu started to depreciate at the beginning of 2011, this trend accelerated at the end of 2014, when the exports and remittances diminished significantly and a series of suspect transactions were performed in the banking sector.
In 2015, the trend reached dangerous levels. So far this year the Moldovan leu depreciated by about 25% against the dollar. As a result, the inflationist pressure increased and the National Bank of Moldova had to toughen up the monetary policy. The share of deposits in foreign currency rose from 39.5% last January to 50.9% this January.
